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1. In the Cagan model, if the money supply is expected to grow at some constant rate m (so that Emt+ s = mt + sm), then Equation A9 can be shown to imply that pt = mt + gm. a. Interpret this result. b. What happens to the price level pt when the money supply mt changes, holding the money growth rate m constant? c. What happens to the price level pt when the money growth rate m changes, holding the current money supply mt constant? d. If a central bank is about to reduce the rate of money growth m but wants to hold the price level pt constant, what should it do with mt? Can you see any practical problems that might arise in following such a policy? e. How do your previous answers change in the special case where money demand does not depend on the expected rate of inflation (so that g = 0)?
Probabilities of A and B performing successfully for 1,500 times are .96 and .92, respectively, and are independent. What is probability that product will operate properly 1,500 or more times.
Elucidate each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.
Advertising is powerfull strategy to make people aware about company products and services and for this case is to emphasize reliability and low price, this effort will help the company to sustain in this area and to develop a customer franchise a..
Illustrate what is the expected value of the future share price? b. Sharon buys a ticket in a small lottery.
For proportional tax system presented in table 7, illustrate what are average tax rates for people earning $50,000, $100,000 and $200,000. Illustrate what are corresponding average tax rates in regressive and progressive tax systems.
The number of parts produced per hour by a worker. when will she be at a maximum productivity.
Illustrate what would be total incremental investment in accounts receivable and invent theory to support expected increase in sales.
Indicate if GDP is affected, under what category and what happens to GDP Oklahoma cleans up after a devastating tornado.
Suppose which the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their monopoly of gambling.
Explore in particular how the two companies respond to the macroeconomic conditions in terms of their.
The settlement requires KopyKat to pay the employee $10,000 per month for the next year. Determine the optimal price and output for the firm under these new conditions.
In markets economics, firms rarely worry about the availability of inputs to produce their products, whereas in command economies input availability is a constant concern. Why the diference.
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