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Biggest Risk - Inflation or Unemployment
In 1980, what was the economy's biggest risk--inflation or unemployment? Do you think the Fed choose to fight inflation or unemployment in 1980?
Suppose you are running a photo copy center that makes illegal copies of the textbook. An illegal copy of the book sells for $10 and you only have one copy machine.
Illustrate each of the following events using a demand and supply diagram for bananas.
For a perfectly competitive firm the price is $2 per unit. At this price the firm is producing and selling 10,000 units. It costs $1.50 to produce the last unit. Should the firm produce more? Less? Why?
Elucidate as carefully as you can why borrowers would be willing to pay a higher rate of interest.
Changes in government spending and interest rates
Discuss how the requirement of a goods and the availability of substitutions impact price elasticity.
Elucidate a firm competes in the market. Does the firm engage in price or non-price competition
Compute the path of the economy, that is , calculate real GDP, the price level, the inflation rate and real money stock for each year until GDP I swithin 1% of the potential. (limit calculated values to 10 decimals points)
Draw the demand curve for the bridge crossings. How many people would cross the bridge when there were no toll? What is the loss of consumer surplus associated with charge of toll of $4.00
Elucidate the three Federal Reserve tools used to undertake a tight monetary policy.
Suppose the level of autonomous expenditure, which we could call A, rises by AA. What is the effect on the level of equilibrium national income?
Bridget has a limited income and consumes only wine and cheese; her current consumption choice is four bottles of wine and 10 pounds of cheese.
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