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Each answer needs to be a paragraph.
1) How does an expansionary monetary policy work? (Describe the steps through which an increase in money supply affects the real GDP).
2) How does fiscal policy work? (Describe the steps through which an increase in G or TR, or a decrease in TX, affects the real GDP).
what is current investment according to the Classical economists? Suppose consumption falls by $500 billion what will happen to savings and investment according to the classical economists?
Suppose the following cost functions of a perfectly competitive company? Compute the firms profit or loss, should firm shut down if loss?
Elucidate what are some measures of total ouput on the horizontal axis of the AS/AD model. Which measure do you think represents the most accurate picture of the output of an economy.
1.nbsp time inconsistencya when is a policy said to be time inconsistent?b describe barro and gordons model of central
When the Bank of Canada sells the government bonds to a commercial bank, the commercial bank experiences a decline in reserves and in increase in bonds. Total assets are unchanged; this is just a portfolio switch between bonds and cash.
My utility for cookies C and milk M is u(C;M) = C1=3M2=3. Every week I have wealth w = $8 to spend on cookies and milk. Last week, prices were pC = 1; pM = 1; this week there is a big sale on cookies so prices are pC = 1=2; pM = 1.
Calculate the equilibrium level of income or real GDP for this economy. What happens to equilibrium Y if Ig changes to 15? What does this outcome reveal about the size of the multiplier?
The story states that good weather has resulted in an unexpectedly large crop, which we know will increase supply and reduce the market price for their coffee beans. If all of the farmers know that picking this large crop will guarantee them lowe..
illustrate what it implies for the relationship between labour supply and productivity growth.
Explain why user cost, or scarcity rent, arises in the intertemporal allocation of a depletable resource such as minerals, and some types of energy and aquifer water resources.
Suppose after submitting your sealed bid in a Vickery austion you find out that they have lost the auction(you were not the highest bidder); However, you have the opportunity to revise your bid. Would you go ahead and change your bid
Assume that the business cycle in the US is best described through RBC theory. An advance in technology raise productivity.
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