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How have you responded to increases in the price of gasoline over the past few years? How would you respond if the price of gasoline doubled over the next two years? What alternatives do you have for buying gasoline? Could you change to zero consumption of gasoline in the short run? In the long run? In the short run, when the price of gasoline increases, what happens to the income you have to spend on other goods?
hat is your expected utility without insurance? Suppose you can buy insurance that will cover the medical expenses but not the foregone part of your salary. How much is an actuarially fair policy, and what is your expected utility if you buy it?
In a closed economy, marginal propensity to consume .6. If the economy opens up to world and marginal propensity to import is .4, using the Keynesian model of output determination;
Illustrate what would be a monetary policy prescription to reduce or eliminate deflation.
Explain why do you think macro-economics applies to your organization. Give at least two examples of macro-economic actions that could affect your organization.
Assume an economy is going through a Recession what type of Monetary Policy requires to be implemented through the Federal Reserve?
What is the saving function? What is the marginal propensity to save and what is the aggregate expenditure function? What is autonomous expenditure? What is the marginal propensity to withdraw?
Critically discuss the strengths and weaknesses of using per capita national income (even once adjusted for purchasing power parity) as a measure of welfare. Discuss at least two alternative measures of national welfare that have been put forward? ..
By how much and in which city is the hotel room cheaper.
Assume you are looking at data for an economy that uses only two inputs, physical capital and labor. The table shows output for different combinations of labor.
According to Gerald Baker, columnist for London Financial Times, November 23, 1999, "In the US, banks are, by whichever measure chosen, in unusually good shape for this stage of an expansion.
Explain how can rational thinking the above behaviors. How do your thoughts impact, if at all, your opinion of the theory.
Assume you are asked to do market analysis in an area in which a natural disaster has recently occurred. For example, Nashville after Spring floods or New Orleans after Hurricane Katrina.
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