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The largo publishing house uses 400 printers and 200 printing presses to produce books. A printer's wage rate is $20, and the price of the printing press is $5,000. The last printer added 20 books to the total output, while the last press added 1,000 books to the output. Is the publishing house making the optimal input choice? If not how should the manager adjust input usage?
Graphically illustrate the impact of an open-market purchase by the Federal Reserve on the equilibrium interest rate using the theory of liquidity preference and the market for real money balances. (Be sure to label:
Michael can buy either pizzas or submarine sandwiches. If the prices of pizza and submarine sandwiches double and Michael's money income triples, we can conclude that Michael's budget constraint will
What is a fixed payment made by the privately insured patient in exchange for receiving the medical good or service? What is the percentage of each and every medical bill that the patient pays rather than the flat dollar amount?
Use a production possibility frontier to illustrate the probable results of your fiscal policy. By how much did consumption change? By how much did savings change?
If the desired fiscal stimulus is $20 billion and the desired AD increase is $50 billion, we can conclude that the MPC is:
Use aggregate demand (AD) and aggregate supply (AS) model in which the short run aggregate supply curve slopes upwards to illustrate the equilibrium level of real GDP and prices if the economy is operating:
Explain the impacts of an expansionary fiscal policy such as a tax cut on the levels GDP, Consumption, Investment, interest rate and unemployment and price.
Maggie's utility function is and her income is $5000. Then her MRS at generic bundle (x1, x2) is 50-0.25x1. Commodity 2 is a composite good, and hence its price is unity.
The rising stock market implies an increase in wealth, at least as measured on paper. If we assume that some of this increased wealth gets consumed, then the rising stock market fuels an increase in aggregate demand, and may contribute to an inflatio..
Using above demanded schedule, find out the elasticity of demand for each price change. (Example: when price changes from $5 to $10, quantity demanded changes from 1000 to 800 oz., so the elasticity of demand, by using average values, is 1/3 or 0...
Describe the effects of monetary policies on the economy's production and employment.
Suppose you decide to withdraw $100 in currency from your checking account. What is the effect on M1? Ignore any actions the bank might take as a result of the withdrawal.
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