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What is the liquidity trap and why is it so dangerous? How does expected deflation set a floor on the real interest rate that the Fed can set? Why is fiscal policy crucial in a liquidity trap? What is meant by a deflationary spiral. Be able to use the AE-PC model to describe the effects of a liquidity trap.
Cournot duopolists face a market demand curve given by P = 120 - Q where Q is total market demand. Each firm can produce output at a constant marginal cost of 30 per unit. Find the equilibrium price and quantity for the total market.
In 2003 at Holloman Air Force Base in New Mexico, test engineers set a world record by moving 192 lb payload at 6,453 miles per hour in a rocket sled. The rocket sled track, built in 1954, is 15.44 km in length. Assume the sled moved at the maximum s..
A “green” (environmentally friendly) office building costs as average of $3.50 per square foot each year to heat and cool. What is the total annual heating and cooling cost of an office building that has 10,000 square meters of space?
Since 1979, low income recipients have been given food stamps without charge. However before 1979, people bought food stamps at a subsidized rate. For example, to get $1 worth of food stamps a household paid about 20? (the exact amount varied by hous..
For this discussion question, you will apply cost principles to business problems. A sunk cost is one that has already been incurred and cannot be recovered. Economic theory supports that only prospective (or future) costs are relevant to a decision...
q1. sprint prior to spinning the businesses off to concentrate on cellular phone service provided both local and long
Avoid having developed economies regress to a Smoot-Hawley type of isolationism or protectionism to avoid job losses in import-competing sectors.
Assume that American lumber companies make 52 billion board-feet of lumber each year, of which 10 billion are exported and 42 billion are sold in the United States. The average price is 30 cents per board-foot. How much producer surplus would U.S. lu..
Explain the main differences between demand-pull inflation and cost-push inflation. Analyze the differences between cost-push inflation and built-in inflation. Does the official unemployment rate understate the “true” degree of unemployment in the Un..
Restrictions on entry and amount of goods produced in production and retail business are usually objected to by economists. Indeed, such restrictions are considered a major source of divergence between the marginal willingness to pay and the marginal..
Compute the price elasticity of Demand for paint also Elucidate how your calculations. Decide whether the Demand for paint is elastic, unitary elastic or inelastic.
Consider two countries, Germany and Sweden. Both countries are at full employment, and Germany devotes a larger portion of its production to capital. Germany is a poorer country than Sweden. Germany will move up on its production possibility curve (p..
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