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1. Define nominal and real GDP. Are these flow or stock concepts? Explain why the differences between nominal and real GDP are important
2. Define the implicit price deflator. Where does this concept come from? How does it relate to nominal and real GDP? How does the implicit price deflator differ from the consumer price index (CPI)?
3. We discussed alternative views of GDP from the perspectives of expenditure, income, and production. What are the basic differences in these approaches? Why do they add to the same total for GDP?
4. What are some of the shortcomings of real GDP from a welfare perspective? Do you have any practical suggestions for revising the computation of GDP to achieve a better measure of welfare?
In the US, realized capital gains are taxed at 15% if they are held for more than a year. Suppose instead that we include realized capital gains (those held for more than a year and less than a year) in income instead so that they are added to an ind..
Select one market segment, and describe in one or two paragraphs what features the cell phone might have in order to be attractive to this segment.
Ridiculousness, Inc., has sales of $48,000, costs of $21,200, depreciation expense of $1,900, and interest expense of $1,200. If the tax rate is 35 percent, what is the operating cash flow, or OCF?
Supply of Loanable Funds, e.g., your disposable and expected future income. Discuss and predict how your decisions and transactions in the loanable funds market should change.
What problem is the economy facing? Assume you are a governor on the Federal Reserve Board of Governors. What type of policy (easy money or tight money) would you recommend to fix the problem you identified in question 1? What could happen in the eco..
Why Benefits in the Short Run? Suppose a country is about to open its markets for trade. In the short run , you would rather be in an industry with s comparative
Yesterday Bank A had no excuses reserves. Today it received a new deposit of $4,000. if the bank maintains a reserve requirement of 2 percent, what is the maximum loam that Bank A can make? What is the maximum amount by which the money supply can be ..
Which countries (and groups within a country) most likely oppose international labor standards? Explain why. Explain why some countries use voluntary export restraints (VER) instead of import quota? List and explain at least three reasons as to why c..
Suppose that a monopolistically competitive restaurant is currently serving 230 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $13 per meal. What is the size of this firm’s profit ..
Use the information in the table to calculate total revenue, marginal revenue, and marginal cost. Indicate the profit-maximizing level of output. If the price was $3 and fixed costs were $5, what would variable costs be? At what level of output wo..
The complexity of the international financial community has never more apparent during a global financial crisis. The international financial community is more vital to the functioning of the US economy than many traditional economic institutions in ..
The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand for ski tickets of out-of-town skiers is given by Qo = 600 - 10 Po, while the demand for ski tickets of local skiers is given by Ql = 400 - 20 Pl . The marginal c..
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