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Suppose the Federal Reserve is concerned about an inflationary gap, and as a result the Fed conducts contractionaty monetary policy.
A. Explain the open market operation the Fed would engage and how that impacts the AD/AS model in the short run.
B. All else equal, how will this affect the value of the dollar in global currency markets? Explain.
C. Does the impact on the value of the dollar help or hinder the Fed's attempts at contracting the economy? Explain.
congress decides to reduce our dependence on foreign oil by imposing a $.50 tax on each gallon of gasoline at the pump. Elucidate briefly what kind of supply and demand elasticity for gasoline must be present in the U.S. market, in order for this..
If the Fed instead maintained the money growth rate from part a, what is likely to happen to inflation D. Which policy do you think is better in the short run? Which is better in the long run?
When looking at inflation, you will find that this is measuring how much prices change. How does this influence the unemployment rate?
Is there a universal code for ethical business behavior? (Check the December 2005 issue of Harvard Business Review for Up to Code: Does Your Company Meet World-Class Standards? by Lynn Paine, Rohit Deshpande, Joshua D. Margolis, and Kim Eric Bettcher..
Suppose that some foreign countries begin to subsidize investment by instituting an investment tax credit. What happens to the investment in our small open economy? What happens to our trade balance? What happens to our real exchange rate?
What would happen to unit sales and total revenue for this textbook if the bookstore reduced it's price? Is the demand for iPhones price inelastic or elastic? Why? Is income elasticity high or low?
Assume the demand for a good is price inelastic, i.e., ed
Currently AIDS is spreading in china and India. Govt. of these nations fail to stop spread of AIDS what are likely consequences for future economic growth in china and India.
In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertises, your rival will make $4 million and you will make $2 million. Write the above game in normal form. Do you have a d..
Demand for a good is Qd = 20,000, 100 P. Supply is Qs = -1000 + 200 P. a. Find Q*, P*, consumer surplus, producer surplus, and total variable costs. Make a graph and label it. b. What is the elasticity of supply at the solution point? What is the ela..
Sketch the indifference curves implied by each of the following statements:
Explain the 4 ways the Federal Reserve would increase the money Supply and explain and graph how this would impact interest rates, consumption, and investment, AD, GDP, Prices and Unemployment.
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