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1. (Continuation from Question 1 - please answer using the same graph as in Q1, or draw a new graph containing same information as your Q1 graph). Let B from Q1 part b represent the long run full-employment equilibrium for the money market.
a. Suppose the Brazilian central bank expanded the money supply during the Olympics, announcing that the change would be permanent. Label the point representing the combined short-run effects of the Olympics boom and the monetary expansion on the money market in the graph above with a C. Label the new forex market equilibrium C'. Is the exchange rate E BR/$ associated with C' higher or lower than it would have been if the expansion had been temporary? Explain briefly.
b. In the long run, how do the values of Ms/P and the exchange rate compare to their values at points B and B'? What are the roles of P and R in the adjustment of Ms/P and the exchange rate to their long-run equilibrium values?
Problem 1: The Morton Company produces and sells two products, A and B, respectively. Financial data related to producing these two products are summarized as follows:
Three women are having breakfast: the CEO of a life insurancecompany, the CEO of a mortgage company, and a retired CEO. The morning paper has a headline:“Inflation rates expected to rise sharply!” For whom is this good news, and for whom is it badnew..
Assume that the Fed unexpectedly raise the rate of money growth.
What would you consider to be an effective split of the total healthcare spend among the major payors (hospitals/facilities, doctors/providers, and insurance companies)? What is the basic logic behind your opinion?
1. Explain why the real exchange rate never changes under the theory of purchasing power parity? 2. What governs the behavior of nominal exchange rates under PPP?
Suppose15 percent increase in the price of airlines causes a 10 percent decline in the quantity demanded then what is the elasticity of demand for airlines.
1. Give examples of industries that are monopolistically competitive. Find the news articles, books which explain these examples.
The country of fishland had a nominal GDP of $1000 in 2003 and $1500 in 2004. The GDP price index was 100 in 2003 and 150 in 2004. Calculate the increase in real GDP in fishland between 2003 and 2004.
Include an evaluation of the impact of past and current budget deficits or surpluses on the United State economy and on the airline industry.
When an inefficient firm or a firm producing a product that people no longer want goes out of business, people are unemployed,but that is part of the normal process of economic growth and development. The unemployment is part of the natural rate and ..
When there is deflation, as in inflation of -1%, the real interest rate that Herb pays (as compared to what he expected to pay): increases, so Herb feels poorer decreases, so Herb feels richer increases, so Herb feels richer decreases, so Herb fee..
Describe the law of diminishing returns. Then discuss why you agree or disagree with following statements.
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