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Must answer all 4 parts and show all work: Suppose that the Fed’s inflation target is 2%, potential output growth is 3.5%, and the velocity is a function of how much the interest rate differs from 5%: % ?V = 0.5 x (i – 5) Suppose that a model of the economy suggests that the real interest rate is determined by the equation: r = 8.5 - % ?Y where Y is the level of output, so % ?Y is the growth rate of output. Suppose that people expect the Fed to hit its inflation target. A. Calculate the optimal money growth rate needed for the Fed to hit its inflation target in the long run. B. In the short run, if output growth is just 2% for two years and the equation determining the real interest rate changes to r = 4.5 - % ?Y, what money growth rate should the Fed aim for to hit its inflation target in that period? C. If the Fed instead maintained the money growth rate from part a, what is likely to happen to inflation D. Which policy do you think is better in the short run? Which is better in the long run?
Compute the short- run and long- run results, explain the changes in the price and in the number of firms.
Offer one good or service that you think would be considered highly price elastic ,one that you think is highly inelastic and Elucidate why.
Assuming that the marginal product of labor is constant between 10 also 11 workers also the marginal product of capital is constant between 3 also 4 machines.
During the last 10 years, Orlando, Florida grew rapidly, with new jobs luring your people into the area. Despite increases in population and income growth that expanded demand for housing, why the price of existing houses barely increased.
what is the approximate real rate of interest. Illustrate the exact real rate.
Find out the contingent demand function for labor and capital and the corresponding total cost function. Find the long-run average cost and the long-run marginal cost of both inputs.
Wicksteed made a significant contribution to value theory during the marginal utility revolution. This contribution was the "Exhaustion of the product"
What is the effect on East Asia's Willingness to trade? b. Assuming that each region is large enough to influence international prices, how do East Asia's good-growing seasons in food affect the equilibrium international price ratio?
Given the experience of the last several years, Elucidate how has the valuation of dot.com changed.
Illustrate what did he know about costing to the chain store representative was overlooking. Be sure to describe or chart the shape of Morita's costing.
Although there was no migration between the states, after Jan. 2003 employment rose in Hamilton and fell in Franklin. How can this be explained.
Determine the most Magna should be willing to pay to lease the land for the expected life of the project and calculate the profit under each possible demand curve with the optimum size of the shopping center.
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