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Define Monetary Policy. Describe the impact that Monetary Policy has on our economy. Name the three major tools of Monetary Policy and describe how each one would be used to lower the money supply.
If there is a permanent adverse supply shock
If the Japanese central bank maintains the disequilibrium fixed exchange rate of 150 yen per U.S. dollar, what happens to Japan's foreign reserves?
What is the equilibrium after aggregate supply changed? If potential GDP is $1 trillion, does the economy have an inflationary gap, a recessionary gap, or no output gap?
A perfectly competitive firm sells 50,000 units of knives at a price of $3. The firm's average cost at 50,000 units is $2.75. Calculate the firm's profit.
What is meant by absolute advantages and comparative advantages? What are the differences between the two?
Draw graphs showing a perfectly competitive firm and industry in long-run equilibrium. How do you know that the industry is in long-run equilibrium? Suppose that there is an increase in demand for this product. Show and explain the short-run adjustme..
how much are households paid for providing entrepreneurial ability.
Assume that the job separation rate s is 0.01 (1%) per month and that the job finding rate f is 0.2 (20%) per month. Assume that the labor force today (period t = 0) is 100 million. What is the steady state unemployment rate for this economy? In the ..
Consider the following investment project with a useful life of 8 years. The marketing department estimates that 10,000 units of the proposed product can be sold per year. Verify that the project is economically attractive (before-tax) at a 12% MARR ..
A commercial bank is concerned about its image among its clients. In a random survey that was run last year among 500 clients, 54% said that they were satisfied with the level of customer service. This year, in another survey among 400 clients, only ..
Suppose, unfortunately, your mathematics and economics professors have decided to give tests two days from now and you can spend a total of only 12 hours studying for both exams. Construct a table for the production possibilities and corresponding nu..
The market for hairbrushes is perfectly competititve. Suppose that the new fashions for hair are "the buzz cut" (no hair) and "the wild and free look" (long and uncombed). Tell the story of how the market and a typical firm respond in the short run a..
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