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Suppose that American households change their tastes such that they want to save more at every level of income.
1. With the help of a Keynesian cross diagram, explain the effect that this change in tastes will have on the equilibrium level of output.
2. Suppose that the Fed uses open market operations to offset the effect of the change in saving on output. Explain what it must do to get output back to its original level. Will the composition of demand be the same as it was originally? Explain.
3. Explain under what conditions (more than one) the Fed's policy would be ineffective. If monetary policy were ineffective, what would be the alternative? Explain your answer.
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Give the before-tax charcoal price and quantity exchanged. Give the after-tax charcoal price to buyers, the quantity exchanged, and total tax revenues.
Describe the effects of monetary policies on the economy's production and employment.
Reflecting back on what you learned about sustainable management practices throughout this quarter; determine 5 activities that illustrate sustainable management of resources that you pursue in your everyday life.
Joan is deciding where to spend her spring break. If she goes to Cancun, Mexico, the trip will give her 9,000 utils of satisfaction and will cost her $300. If, instead, she travels to Florida, the trip will give her 5,000 utils of pleasure and w..
President Obama pushed his massive fiscal stimulus package of $787 through the Congress and later passed by the House and Senate, whose centerpiece was spending most of this stimulus funds
For a perfectly competitive firm the price is $2 per unit. At this price the firm is producing and selling 10,000 units. It costs $1.50 to produce the last unit. Should the firm produce more? Less? Why?
In which of the following circumstances is expansionary fiscal policy more likely to lead to a short-run increase in investment? Explain?
Would you rather earn a 4 % nomical or 4% real interest rate? Illustrate by describing the difference between nominal and real variables.
Draw a diagram showing the current situation of the firm. In addition to the above information, suppose the price of the output is $13/unit, if the firm wants to maximize its profit, what should it do? Explain in detail with the aid of a diagram.
Describe what effect an expansionary fiscal policy would've on the price level and real GDP starting from full employment equilibrium.
According to law of comparative advantage , who should produce wheat and who must produce Cd palyer? Evaluate all relevant opportunity cost.
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