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During the 1990’s, the U.S. economy experienced strong growth, full-employment, and very low inflation rates. How could you explain this, using the AD/AS model? In other words, what shifts in AD and/or AS would explain this outcome? Think about this not just in terms of AD and AS, but also in terms of the specific changes that can lead to shifts of those functions.
Suppose that the income of the average Canadian household increases because a larger percentage of women enter the labour force. What do you think will happen to demand for the following products or services? What does your answer imply about income ..
Which of the following is NOT an example of adverse selection
Consider an industry that consists of two firms, A and B. They face a demand curve q = qA + qB = 14 - p, where p is the industry price of output. Both firms have constant average and marginal cost of $2. Suppose they form a cartel and choose the pric..
Assume that wages and prices are sticky and that we start at a long-run equilibrium. Assume that at this initial point, the growth rate of the money supply is 5%, the growth rate of the velocity of money is 4% and that the real economic growth rate i..
Prices perform a rationing function by A. eliminating scarcity in the market. B. making sure that buyers do not have to wait for goods. C. allocating goods to the buyers who are willing and able to pay the highest price. D. allowing? high-demand buye..
Explain why does a newspaper dispenser open to a stack of newspaper and essentially "trusts" a consumer to take just one copy.
According to Bacon, the objects of scientific inquiry were phenomena that could be found by unaided senses. Thinking of present day today, we live in a world with advanced technology and super machines, would Bacon change his views if he were alive? ..
1. explain why work done at home is not incorporated however housing services that are also done at home are
Assume that the firms act independently as in the Cournot model i.e., each firm assumes that the other firm's output will not change.
The following questions refer to a capital budgeting problem with six projects represented by binary variables a, b, c, d, e, and f. Write a constraint modeling a situation in which two of the projects 1, 3, 5, and 6 must be undertaken. Write a const..
Full employment GDP is $11,000. Equilibrium GDP is $10,000. The marginal propensity to consume is.5. What could the government do to achieve full employment and price stability using a) government purchases and b) taxes?
DeAngelo Corp.'s projected net income is $150.0 million, its target capital structure is 25% debt and 75% equity, and its target payout ratio is 65%. DeAngelo has more positive NPV projects than it can finance without issuing new stock.
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