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a) What are the effect of a fall in the cash rate on consumption, investment and net exports?
b) Suppose that the RBA uses an appropriate policy and is successful in keeping real GDP at potential in 2017. What type of monetary policy that the RBA should adopt, and what are the effects of the policy on real GDP, the price level and employment.
What does gross domestic product (GDP) tell us? How did GDP change from 2008? What caused these changes? What is real GDP? What was real GDP in 2008 and has it changed since 2008? What was national income (NI) for 2008? What does national income tell..
A firm is currently producing 80 units of output. At this level of output produced, P = 150 and ATC = 120. Also assume that MC = 130 and MR is constant at all output levels and equal to 150. Is this firm making profits? If so, what are these profits?
Duffy derives utility from only two goods: milk and cookies. He only consumes milk and cookies in fixed proportions: he likes to have 4 cookies with each glass of milk. Determine and graph Duffy’s budget constraint (put milk on the horizontal axis). ..
FatGear Corporation has recently finished building a new factory. They moved into the factory a month ago and found that it is the perfect size given the amount they want to produce. FatGear is operating in the A) production time B) corporation time ..
Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $0.60 per bottle. Elucidate which of the following statemen..
Larger companies like Toyota and VW will ultimately survive - they have a good deal of money and power to ride out the storm. Toyota is still a top seller - even with all the problems they have had and continue to have. Can you explain why? Why would..
Suppose you estimate the following cost equation: AVC = 4832 – 0.5(Q) + 0.00007(Q)2 At what quantity is AVC minimized Suppose this firm sells 3500 units per month at a price of $4000.00 each and has fixed costs of $10,000 per month. What is the firm’..
If the goal of the firm is both short- and long-run profit maximization, Discuss goals a firm might have which seem to not agree with profit maximization. are these goals consistent with profit maximization?why or why not?
The Campus Crustacean Company receives $3,200.00 for its crawfish from selling 1,600 boxes to maximize its profits. What is the total profit of crawfish at this equilibrium level of output if Total Variable Costs are $1,600.00 and Total Fixed Costs a..
Creativity, curiosity and creating value are key parts of the entrepreneurial mindset that won’t always prevent failure. Which of the following will help you avoid failure?
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are also willing to sell at the same prices. What is the equi..
Suppose there are two consumers, A and B, and two goods, X and Y. Consumer A is given an initial endowment of 6 units of good X and 1 units of good Y. Consumer B is given an initial endowment of 2 units of good X and 7 units of good Y. Suppose the pr..
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