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Assume the economy initially is in a long run equilibrium plus the following: the U.S. dollar is relatively strong against all major foreign currencies. Suppose the Congress and the President decide to decrease government spending dramatically on all federal programs. Meanwhile, the G-7 has unanimously decided to help U.S. exports to western Europe. At the same time, the Fed’s policy is to prevent inflation from increasing beyond its current rate. Using the AD/AS model, briefly explain the short-run and long-run effects on inflation and real GDP that these policies will have.
In 2001, the U.S. government mailed rebate checks in the amount of $300 or $600 to many households. Discuss what would happen if the U.S. government did the same thing today. Would households spend the extra income or use it to pay down debts
Fiscal policies can work only if private enterprises respond to them in certain way; if they respond in other ways, the policies fail. Explain and give examples.Can the government make things worse by intervening in markets Are there other options..
Explain how a firm in a competitive market identifies the profit-maximizing level of production. When should the firm raise production, and when should the firm lower prodcution?
amount of hours a week to be split between market-labor and home-labor. Assume that A can make $20 of market goods per week and $10 household goods per week; assume B can make $10 of market goods per week and $20 of household goods per week.
Why might the existing firms in a cartelized industry prefer to be regulated by the government? What is the problem with common property resources?
Estimate the opportunity cost of taking this class. Include direct expenditures such as tuition, books, and supplies, as well as indirect expenditures such as the value of the time spent in class. Don't forget to include the opportunity cost of ti..
The state of Maine has a very active lobster industry, whichharvests lobsters during the summer months. During the rest of theyear, lobsters can be obtained from other parts of the world but ata much higher price.
Entry of firms in a monopolistically competitive industry is characterized by two "external" effects. What are these effects and how do they affect a monopolistically competitive firm. How are consumers and incumbent firms influenced by these exte..
Credit cards are sometimes discussed as a public problem. In 2001, purchases on credit cards accounted for 21% of consumer spending in America, which has the lowest savings rate of any big country.
What are the 3 "general ways" (Money can be classified into 3 group) that you use our monetary tool (the US $) to make your life better Why did some people say "money is the root of all evil" when money has always just been an inamite tool
Determine the four phases of the business cycle? How long do business cycles last and how do seasonal variations and long-run trends complicate measurement of businrss cycle?
A recent news story reported that OPEC is expected to decrease the supply of oil next summer. Summer is traditionally a time of increased demand for oil because of the many families driving and flying to vacation sites
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