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Suppose that because of the ongoing financial turmoil banks become more prudent: that is, other things equal, banks want to hold more excess reserves and make fewer loans.
a. With the help of an equation of the money supply, explain the effect that this change in bank behaviour will have on the quantity of money.
b. Next, use a graph of the liquidity preference theory of interest rate determination to explain the effect on the interest rate and the quantity of money.
c. Next, use a graph of the loan able funds theory of interest rate determination to confirm the results in your answer to b.
According to the Heckscher-Ohlin theorem, is Russia capital abundant or labor abundant? Briefly explain. What is the impact of opening trade on the real wage in Russia? Briefly explain.
The Lexus LS 430, the top of the line Lexus sedan, riad a base price in Canada of C$85,700 during the fall of 2005. Restated in US dollars using the exchange rate prevailing then, that price is $71,885.
What is the profit-maximizing price-output combination and what are the levels of the profits and consumer surplus at that point? What is Dead-weight-loss?
Question based on Laffer Curve : Tax Rate and Tax Revenue, Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?
Production Possibilities Tables for Germany and Canada (note that we are assuming that opportunity costs remain constant along the production possibilities frontier), and that each country produces only these two products).
What is opportunity cost? Explain with the help of an example, why assumption of constant opportunity cost is very unrealistic? Explain law of demand with the help of a demand schedule and demand curve.
What types of inefficiencies and/or externalities arise in each renewable resource case that interferes with sustainable and efficient management results?
In the following list a number of well-known companies and the products that they sell. Which of the four types of markets (perfect competition, monopoly, monopolistic competition, and oligopoly)
Exchange and markets, Demand supply and market equilibrium
Dana's Doorsteps (DD) is a monopolist in the doorstep industry. Its cost is C= 10Q and demand is P = 30- Q.
Your company is considering expanding overseas. It is particulary interested in developing markets, and narrowed its choice down to two countries, A and B.
Describe the Soviet Rapid Development Model
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