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Suppose Sally only purchases food and clothing, and her utility can be expressed as U = F _ C. Currently, food costs $5 per unit and clothing costs $2 per unit. Her income is $70.
What is her optimal bundle?
Demonstrate that removing the subsidy will make consumers worse off but will nevertheless improve society's economic welfare.
Suppose that all other banks hold only the required amount of reserves. If Nan Bank Inc. decides to reduce its reserves to only the required amount, by how much would the economy's money supply increase?
If the US population is growing at .88% per year, while GDP is growing at 2.5% per year, and if these growth rates remain constant for the next five years, what will be the population and GDP levels in five years? Please show your work.
By how much will each firm reduce its SO2 output? Which firm will buy permits, which firm will sell them, and how many permits will be exchanged?
According to a recent article in the Wall Street Journal, side-impact crashes are among the deadliest, accounting for nearly 10,000 deaths per year.
Show the changes to the T-accounts for the Federal Reserve and for commercial banks when the Federal Reserve buys $50 million in U.S. Treasury bills.
Suppose the Federal Reserve lowers its target for the federal funds rate six times in seven months while the European Central Bank leaves its target for short term interest rates unchanged.
Consider the following Solow model of growth. Both population and work force grow at the rate of n=1% per year in a closed economy.
The questions posed are broad and open ended so be careful to allow yourself enough research and planning time.
Consider the instrumental variable regression model Y i β 0 + β 1 X 1 + β 2 X 1 +u i , where Z i is an instrument
Credit cards are sometimes discussed as a public problem. In 2001, purchases on credit cards accounted for 21% of consumer spending in America, which has the lowest savings rate of any big country.
According to the neo-classical economic theory, the market is a natural, self-regulating system that tends automatically towards the full employment equilibrium of supply and demand.
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