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Practice Questions 7
1. Identifications: define and give a brief statement about the significance of each of the following terms:
Full employmentFrictional unemploymentStructural unemploymentCyclical unemploymentSeasonal unemploymentNatural rate of unemploymentHyperinflationIntermediate targetsOperating targetsReal bills doctrineFree reserves
2. True/False/or Uncertain: for each of these statements decide whether you think the answer is TRUE, FALSE, OR UNCERTAIN and then briefly explain your answer.
Set up a diagram showing the firms total revenue and total cost schedules. In this diagram, show the points at which the firm is maximizing profits.
A woman made 10 annual end-of-year purchases of $1000 worth of common stock. The stock paid no dividends. Then for 4 years she held the stock. At the end of the 4 years she sold all the stock for $28,000.
Suppose a monopolistic competitor in long-run equilibrium has a constant marginal cost of $6 and faces the demand curve given in the following table:
Compute and contrast at least two two-year forcasts from separate sources for two economic indicator.
The economy is initially in long-run equilibrium. The AD curve shifts to the right and the price level rises. Assuming that the economy is self-regulating, the SRAS curve will shift to the left and the price level will rise even further.
Explain how an increase in interest rates initiated by the Federal Reserve affects:
Discuss ways the Fed's objective function can be used with an economic model to evaluate alternative monetary policies. Discuss ways that economists could use the Phillip's curve to create better economic policy than we currently have.
A president proposed a tax cut in the early 1960s. He said "It is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise tax revenues in the long run is to cut tax rates now." Can someone ..
Briefly explain in words the sequence of changes that occur as the two economies move from no trade to free trade.
Suppose that the average prices of refrigerators have fallen over the past few years, yet the refrigerator companies have offered more and more of them for sale. Does this mean that the supply curve for refrigerators is downward sloping?
Illustrate what is the purpose of the foreign exchange markets
Assume the effects on salaries and employment of such agreements. Also, indicate some of the reasons why they may be difficult to enforce.
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