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Market questions come in two types: Type 1: you are given the exogenous variable change and you must shift the correct curve in the right direction and then determine the new pr
Assume that when an economy has a GDP of $500, Consumption is $550. The MPC is .75. Investment is 25. Begin the problem by setting up an Income/Consumption Schedule like the one on
You make a monthly deposit of $1,000 into a saving account for the next 10 years. How much can you withdraw immediately after your last deposit if your saving account pays 6% per y
Suppose that Ana is buying only 2 goods: good 1 and 2. If the price of good 1 doubles and the price of good 2 drops by one third, then what happens with the budget constraint? (Ass
I. Consider the following static optimization problem. Suppose that a consumer has financial wealth W and owns the house H¯ . She has utility over housing H and nonhousing co
what does international trade fails to its claims ?
If the reserve bank wants to pursue a contractionary policy, what should it do?
In our 2 period consumption savings model (with no leisure, u(c1, c2), suppose interest income in period 2 is taxed at the rates, where 0 a) Write down period 1 and period 2 bu
Q. How much money can banks create? Does that mean that banks can create an unlimited amount of money? No the answer is no - it would require them to lend an unlimited amount o
what is credit multiplir and how does it work
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