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In his recent book "The End of Poverty", economist Jeffrey Sachs of Columbia University advocates a big increase in gifts (not loans) from rich countries to developing countries. Suppose that rich countries surprisingly commit to much higher official aid, to be maintained for several decades. What would be the effect of such aid on?
(a) The real wage and hours worked in the short run;
(b) The real wage and hours worked in the long run? Explain your answers.
Essay on Market imperfection associated with negative externalities
In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?
What were some of causes of stagflation of 1973 and 1979? In what ways were these episodes of stagflation different from great depression of the 1930s?
Karen earns $75,000 in the current period and will earn $75,000 in the future. Assuming that these are the only two periods, and that banks in her country borrow and lend at an interest rate r = 0, draw her inter-temporal budget constraint.
Suppose that in the market for comic book illustrators the substitution effect dominates the income effect While visiting Comic Con.
Suppose the emarginal cost of producing the good in before question is aconstant $ 10 per unit of output . What quantity of output will the firm produce.
How income may change savings behavior
Draw a correctly labeled loanable funds graph that shows what happens to real interest rates.
Suppose the CFO of a German corporation with surplus cash flow has 1 million Euros to invest. Suppose that interest rates on 1-year CD deposits in U.S. banks
Suppose you are running a photo copy center that makes illegal copies of the textbook. An illegal copy of the book sells for $10 and you only have one copy machine.
A tariff I ssimply a tax on imports. Use our model of the excise tax (with diagram) to expain why domistic firms request that tariff? Consider both the domestic and the foreign country in your answer
Is the economy of a big city more competitive than that in a small town or given neighborhood? How? Do you think your local grocer has monopoly power?
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