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Over time we observe prices of goods and services we buy increase. Often this price increases are quite visible but sometimes grocery stores use ingenious ways to conceal the rising prices. I am sure you have noticed that grocers instead of raising prices, they often reduce the quantity; you tend to notice packages are getting smaller. Put differently the unit price of the product is rising. That is why the Federal government mandated to show the unit price in addition to the products price, so that the consumer can compare products fairly before purchasing. This rising price levels is called inflation.
What is inflation? It is the rate of change of general price level? A natural question to ask is "What is the general price level"? How do we measure the general price level?
If he is an expected utility maximize who tries to maximize the expected value of ln W, where ln W is the natural log of his wealth, Explain how many coupons would it is rational for him to buy.
Explain how an acceleration of the GDP growth rate could have contributed to the fall in the debt-GDP ratio during the 1990's.
Find out the purchase price to gain thirteen percent compounded semiannually.
q1. consider the firm with a single factor of production defined implicitly by the relation z q3 4q where z is the
Define and describe the relationships between the following: actual and real dollars, inflation, and real and market (combined) interest rates.
A. Suppose the demand for electricity in some large community is given by the following demand function P = 1200 – 0.4Q. If the supply function is given by P = 400 + 0.6Q. What is the market determined quantity of electricity that will be generated i..
Suppose that a firm had a production function given by: q=2L0.5K0.5. The rental rate for the firm is $10 and the wage is $5.
If a single salad bag is selected at random from the box, what is the probability that it is shredded cabbage?
Imagine that a presidential candidate wants to replace all federal income taxes with a federal sales tax. Assume that the proposed sales tax rate can, and will, be set at a level that guarantees the new sales tax will generate exactly the same amount..
Suppose you want to remove fourteen fish of an exotic species that have illegally been introduced to a lake. You have three possible removal methods. If the marginal cost of each removal method are, respectively, $10q1 , $5q2 , and $2.5q3 , how much ..
Why must a balance sheet always balance? What are the major assets and claims on a commercial bank's balance sheet.
What are net exports equal to when GDP=$2000, Investment (I)=$200, Consumption (C )=$1200, and Government Services (GS)=$300? If taxes equal $200 and there are no transfer payments, what do savings equal? And if imports equal $160, what do exports ..
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