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What is the liquidity trap and why is it so dangerous? How does expected deflation set a floor on the real interest rate that the Fed can set? Why is fiscal policy crucial in a liquidity trap? What is meant by a deflationary spiral.
Nicole is applying for a health insurance policy. She has liver disease and other health problems. She honestly disclosed the true facts to the insurance agent. However, the agent did not include all the facts in the application. The contract was iss..
A convenience store manager earns a base salary plus small bonuses for each of ten different possible monthly milestones he meets. Typical managers can meet half of these milestones. Do they miss the others by a little or a lot?
Suppose that households in the U.S. increased their desired holdings of currency by $55 million as the Fed was adding reserves to the banking system. How would your answer to question (2) be affected, assuming that the Fed still wished to generate an..
Brenda and Lela are sisters. They both like to make ice cream and cake. Brenda makes one batch of ice cream in eight hours and bakes a cake in two hours. Lela makes one batch of ice cream in 10 hours and bakes a cake in 5 hours. Who has the absolute ..
The mayor of new monopoly realizes that the congestion at the port cost the shipping companies and his town money. Which decision would not move him towards a command economy?
Your son is graduating from high school and is about to enter the work force. He has developed a strong curiosity about our economic system and how it works
Why, as game theorists, do we want to obtain an interval measurement of preferences rather than an ordinal measurement? In particular, what does an interval measurement allow us to do that an ordinal measurement doesn’t? Are there any limitations on ..
Which of the following statements are true about transfer payments with regard to computing GDP? Check all that apply
A monopoly sells in two countries, and resale between the countries is impossible. The demand curves in the two countries are p1 = 100 - Q1and p2 = 120 - 2Q2. The monopoly’s marginal cost is MC= 0.8Q since C(q) = 0.4Q2. Solve for the equilibrium pric..
What would be the equilibrium price? What is the equilibrium quantity?
Always Round Tire is the only producer of tires for the new British import, the Maxi Copper. Demand for a set of four tires is P = 800 - 5Q (note: Marginal Revenue has twice the slope as the demand curve) while the cost incurred by the firm is MC = 1..
decide how line is too long and leave without getting into line. Assume that no car that actually chooses to enter line leaves without service.
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