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Consider an economy with the following characteristics. The size of the lab or force is given by L, and the numb er of employed and unemployed workers is E and U , resp ectively. Supp ose that the job nding rate of unemployed workers is equal to f , and that the job separation rate of employed workers is equal to s. Assume that f and s are b oth exogenous and constant over time. Derive the natural rate of unemployment in this economy, dened as the steady-state rate of unemployment. Based on your answer, what is the impact of a change in the size of the lab or force on the natural rate of unemployment? Why?
Describe the Harrod-Domar growth model, and explain precisely how the model illustrates dynamic instability. Why is it often called the knife’s edge model? Another question lurks behind nearly all discussions of macroeconomic policy: Why should we be..
When the GFC crisis hit, most of the developed world went into recession. According to the strict official definition of recession, Australia did not. Examine the relative roles played by the Federal Government, the Reserve Bank of Australia and f..
If potential GDP is $20T, what do you expect the actual GDP to be? (Round to nearest $10B)
Supposing that the constraint increases by 1 ie X+Y =1001 ,by how much does the cost increase
The Fed's actions are subject to executive branch control. Politically controlled banks are better at fighting inflation than are independent central banks. The Federal Reserve is considered to be an independent central bank. The Federal Reserve Syst..
Ove makes a line of men's hooded sweatshirts. The costs associated with the business are as follows: $5/Shirt for raw materials, $2/per zipper per shirt, 1 hour
Arian is about to borrow $2,000 from his uncle. He has an option to repay the loan at the end of year 4 with 5.43% simple interest per year or with 8.99% interest per year, compounded every 5 months. What is the difference of the total interest paid ..
A two-input (using capital and labor) Cobb-Douglas production function takes the form:
In the late 1990's, car leasing was very popular in the United States. A customer would lease a car from the manufacturer for a set term, usually two years, and then have the option of keeping the car. Why was the manufacturer losing money on this pr..
The existing equipment will be sold for $6,000. Illustrate what is the first cost that should be used.
how can two countries both be better off as a result of trade? how can tariffs protect u.s. jobs? do tariffs lead to a
How does the price elasticity of a good or service affect who pays a tax on it? the buyer? or seller? Please explain in details with example.
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