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The demand schedule for the product 'xyz' is given below:
Price($) Quantity demanded3 204 155 116 97 7
Task: Based on the above data, solve the questions given below:
Compute the point price elasticity of demand for an increase in the price from $5 to $6.
Compute the point price elasticity of demand for a decrease in the price from $6 to $5.
Why does the magnitude of price elasticity differ in a and b above, although the same set of price-quantity combinations are used to compute the price elasticity of demand? Is their an alternative method that can be used?
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In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?
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Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.
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