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According to the RBA website, the current inflation rate is 1.5%. The RBA normally aims for inflation to be between 2 and 3 per cent. Since inflation is below 2%, and in reference to the media release by Glenn Stevens, why didn’t the RBA reduce the cash rate?
A. Reducing the cash rate will discourage spending as it will cause prices to rise
B. Reducing the cash rate will discourage spending, causing business profits to fall and an increase in unemployment
C. Reducing the cash rate would encourage more spending and less saving
D. Reducing the cash rate would reduce the cost of borrowing and cause further rises in house prices
Goleta Brewing Company hires only two types of labor, managers and brewing assistants (denoted by M and B, respectively). GBC has the following Cobb-Douglas production function F(M,B) = m5 B5 and wants to produce 10 barrels of pale ale this week. How..
What is the "current macroeconomic situation" in the U.S. (e.g. is the U.S. economy currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time?
If a monopolistic firm (price searcher) can sell 9 units at a price of $100 each but must reduce its price to $80 in order to sell 10 units, then Demand is inelastic and marginal revenue is negative. Marginal revenue is falling but is above price
What is expansionary fiscal policy? What is the purpose of expansionary fiscal policy? What are the possible expansionary fiscal policy solutions? Why should the government be concerns with fiscal policy? What is stabilization in fiscal policy? Menti..
Which of the following statements is consistent with what happened during the Great Recession? Identify whether the following statement is more likely to come from a classical economist or a Keynesian economist. “The recent decline in consumer confid..
The US government has given legal status to some qualified illegal immigrants, white and blue color workers. What is the main economic reason for such a policy? Briefly explain and show it graphically (AD and AS).
The amount of money generated in a week can be viewed as a random variable with a mean of $700 and a standard deviation of $130. Find mean and standard deviation of an employee's total pay in a week.
If the economy is competitive so that factors of production are paid the value of their subsidiary products, what is the share of total income that will go to land.
Explain how does the bank's Find outing relate to economist's traditional focus on Illustrate what people do, rather than Illustrate what they say they will do.
A small manufacturing firm is considering the purchase of a new machine. Two types of machines are available on the market. The lives of Machine A and Machine B are four years and six years respectively, but the firm does not expect to need the servi..
Determine whether the following production function exhibits constant, increasing, or decreasing returns to scale
What is difference between a change in supply and a change in quantity supplied? How the following factors will affect the supply curve? (your answer must be supported by a neat diagram):
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