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Question: 1. Suppose the economy is significantly weakened, real GDP is far below potential GDP, and the unemployment rate is high. The Federal Reserve is concerned that monetary policy might have limited effectiveness due to deflation. How can deflation limit the Fed's ability to increase aggregate demand?
2. Explain the two main causes of banking crises.
3. In 2010 the British government increased taxes and cut public spending in order to reduce its budget deficit and debt. Was this a policy of fiscal stimulus or austerity? What was the impact of the policy?
4. The economy is in a recession. The head economist at the central bank is concerned about the growing possibility of a liquidity tap. The head economist for the president is an ardent Keynesian. What will this Keynesian economist recommend or not recommend? Explain.
5. Suppose that on January 1 the exchange rate was E120 per US. dollar. On December 31 of that year, a person needed 125 to buy $1. over the course of that year, did the dollar appreciate or depreciate against the yen? Did the change in the exchange rate make American goods and services more or less attractive to Japanese consumers? Explain.
Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.
Some commentators have argued that the failure of the “Super committee” is good thing for the economy? Do you agree?
Case study analysis about optimum resource allocation: - Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..
Questions: : Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month? Explain your choice.
Problem - Total Cost, Average Cost, Marginal Cost: - Complete the following table of costs for a firm. (Note: enter the figures in the MC column between outputs of 0 and 1, 1 and 2, 2 and 3, etc.)
Problem based on Oligopoly and demand curve, Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?
Explain the impact of external costs and external benefits on resource allocation; Why are public goods not produced in sufficient quantities by private markets? Which of the following are examples of public goods (or services)? Delete the incorrec..
Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..
Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:
Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..
"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"
Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"
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