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Inflation in Germany Once we have monthly data on a price index we can calculate inflation. In most nations, the percentage change in price index during one month is small. So,
Suppose that the economy is characterized by the following behavioral equations: C= 170 + 0.7YD I= 170 G= 150 T= 100 a. What does equilibrium output equal? Y=? b. What d
1. Suppose the banking system has reserve of $750000, demand deposits of $2500000 and a reserve requirement of 20%. a. if the fed now purchases $125,000 worth of govt bonds from t
The Budget Line: The Consumer Constraints The consumer would like to maximize his satisfaction by reaching the highest possible indifference curve. But in the process, he faces
Aggregate Demand Policies Both fiscal and monetary policy changes shift the AD curve. Let us see how, starting with a fiscal expansion. See figure 6.2. In the upper panel, the
Face Tree manufactures artificial trees and flowers. There are about 100 workers who do the routine assembly work for pay ranging from $8 per hour to $15 per hour. They work in two
Suppose that the U.S. Department of Agriculture (USDA) administers the price floor for cheese, set at $0.17 per pound of cheese. (The price floor is officially set at $16.10 per hu
Suppose three identical firms are engaged in Cournot competition in quantities. They all have marginal costs equal to 40. Market demand is given by: P(X) = 200 - X = 200 - (x
An experiment is explained by an exponential random variable with mean ? and x1 and x2. A proposed test of the hypothesis ?=2 next to the alternative ?=½ uses the critical region {
you and your neighbor (n) consume without trading. suppose you are initially consuming 7 bananas and 3 coconuts and your neighbor is initially consuming 6 bananas and8 coconuts. Yo
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