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List and explain the two types of inflation. Which type of inflation would most likely be associated with a negative GDP? Which type of inflation would be most likely associated with a positive GDP gap?
Explain expansionary and contractionary fiscal policy. Explain what policy would be used in each of the following scenarios; depression, recession, and robust growth with inflation. What are some of the implementation problems with fiscal policy?
Would you rather earn a 4 % nomical or 4% real interest rate? Illustrate by describing the difference between nominal and real variables.
Application of Nash Equilibrium and Game Theory with examples
Explain why a monopolist will never set a price (and produce the corresponding output) at which the demand is price-inelastic.
Compute the short-run profit maximizing level of labor and capital demand. Compute the long-run profit maximizing level of labor and capital demand.
For the product shown, assume that the minimum point of each firm's average variable cost curve is at $2. Construct a demand and supply diagram for the product and indicate the equilibrium price and quantity.
Assume that the economy starts in steady state. According to the Solow growth model, how would each of the following affect consumption per worker in the long run, Explain?
A firm uses two inputs, unskilled labor (L) and capital (K) to produce its product. The wage rate for one unit of labor is $5, while units of capital cost $20.
Which country is capital abundant according to the Heckscher-Ohlin theorem? Given your answer to (a), draw the PPF for Canada. Also draw the indifference curve and the relative price line for the no-trade equilibrium.
Suppose a frost kills a large portion of an orange crop, with a resulting higher price of oranges. It has been said that such an increase in price benefits no one since it cannot elicit a supply response; the higher price, it is said, simply "line..
Vulnerability Analysis
Taxi fares in New York recently were increased by nearly 50%. Predict the effect on the price of taxicab medallions, the earnings of taxicab drivers and congestion in New York streets.
Explain how the Central Bank can set the nominal interest rate in the money market. In addition, explain how it can use expansionary monetary policy to boost GDP if the economy is in a recession.
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