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Using the four scenarios referred to in this chapter, choose periods when each scenario has occured in the U.S. or other countries:
a. higher interest rates, more capital invested
b. lower interest rates, less capital invested
c. lower interest rates, more capital invested
d. higher interest rates, less capital invested
A decrease in government spending initially and primarily shifts which curve in what direction?
Why is the purchasing of new housing included in the investment component of GDP rather than the consumption component? Also any reason why household purchases of new cars should be included in investment rather than in consumption?
What government policies are available to reduce domestic demand in the medium run. Identify which components of domestic demand each of these policies affect.
Assume that the wholesale skim milk market is perfectly competitive. Suppose demand is described by P=5.10-0.80Q and supply is described by P=1.90+0.20Q. If there are no price controls, what would be the equilibrium quantity?
Do you believe there is a power shift away from the U.S. and that the west is in decline? Why or why not? Do you believe the U.S. should cede this power? What impact would we see if the U.S. did cede power to Brazil, Russia, India or China?
Two alternative investment proposals are under consideration for a vacant owner by Urban Development Corporation. Plan A would require an immediate investment of $120,000 and first-year expenditure for property taxes, maintenance, and insurance of $4..
If nominal output rises from $13.5 billion to $14 billion and the GDP deflator rises from 100 to 105, What is the percentage increase in nominal output? What is the percentage increase in the price index?
Suppose the required reserve ratio is 8% and that banks hold no excess reserves and the public does not change its currency holdings. If the Fed sells $5 million worth of securities, the amount of deposits in the banking system changes by $______ mil..
Admiralty law the law that deals with controversies arising on navigable waters used a rough-and-ready method of dealing with the problem of the administrative costs of comparative negligence. Rather than try to fine-tune the degrees of culpability b..
which good should the government impose the tax if it needs to maximize government revenue
A tariff is a tax on imports. Use the model of the excise tax to explain why domestic firms ask their government to "protect" them with a tariff. Consider the winners and losers from the tariff. Why do economists tend to think that tariffs are a bad ..
Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost: You just received an offer in the mail to transfer your $13,200 balance from your current credit card, which charges an annual rate of 21 percent, to ..
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