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a. The public's preference is to hold their money as half cash, half demand deposit. Reserve requirement is 25%. Determine monetary multiplier.
b. They now decide to split off half the cash into savings accounts. How much M2 is generated from a $100 increase in monetary base?
Assume bread is subsidized in a small Caribbean nation with a high percentage of citizens who live in poverty. The subsidy is paid to suppliers of bread through government in amount of 50 pesos per loaf.
Consider economy that is above full-employment equilibrium (natural rate of output) because of an increase in AD. Prices of productive resources have'nt changed. With the help of graph
Is it possible that the levels of unemployment present day which are the result of government policies.
Price Discrimination: Assume that United Airlines knows that it faces the following demand equations and corresponding marginal revenue equations for its (one-way) SFO to Las Vegas route
The public tends to view trade deficits with alarm while macoreconomics claims that trade deficits can actually be usefull for the economy. Discuss the macroeconomists position on trade defilicts
Suppose a risk-averse consumer has an initial wealth of $5,000 and a utility function U(M) √M.. He faces an 80 percent chance of losing $4000, and a 20 percent chance of losing $0.
Describe and graph (using AD/AS framework) an example in today's news of fine tuning economy. Assume the MPC in an economy is 0.8, the APC is 0.8 and disposable income is $9 billion. If disposable income increases to $14 billion, what is the new le..
The similar same set of price quantity combinations are utilized to compute the price elasticity of demand
Assume that Jim goes to work at age twenty-five, earns an average $40,000 a year for 40 years. He inherits $320,000 when he starts working. He expects to live to be 75.
Your analyst tells you that he has estimated the following linear regression model of your company's long run technology:
You have been hired to work with a resort owner in Northern Minnesota. This resort owner runs a very small operation catering to mostly people who like to fish.
Explain by how much should domestic automakers raise the price of automobiles if they wish to increase sales by 5 percent next year?
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