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Imagine you are a member of Congress. Since consumer spending comprises at least 2/3 of real GDP, you know that increasing that spending would boost the U.S. economy in the short run. During a press conference, a member of the press asks you what your policy proposals are to increase consumer spending and what this means for national savings. Discuss 2 of your proposals in under 1 page.
An empirical observation that led to the development of the supplier-induced demand hypothesis is that when the supply of physicians in a market increases, the price also increases, which defies the basic rules of supply of demand. Proposed policies ..
Can you relate the Classical and/or Keynesian macroeconomic models to assumptions about economic behaviors and to economics policies being implemented in the U.S. economy today? Discuss this with your group members. Is there anything that you've lear..
Describe two reasons why a country may be facing a Balance of Payments (BOP) deficit. What is the Official Reserves Account (ORA) and why is it more important for countries under a fixed exchange rate regime than for those under a floating exchange r..
Household finances are similar in some ways to a nation’s international transactions. Suppose a household consumes (spends) more than its income. What are 3 legal ways it can finance this deficit? Give an example of each. How can a nation that runs a..
Assume that the salary of MBAs was normally distributed. If the mean salary of a MBA was $100K with a standard deviation of $10K. What is the probability that a MBA makes less that $70K or more than $130K?
Why is a point below the production possibilities curve less efficient than a point on that curve?
Suppose wages in the market for plumbers increase. Some plumbers start taking on extra plumbing jobs while others cut back on the number of hours they work. What could explain? this?
In March 2008, the Fed helped prevent the bankruptcy of Bear Sterns. However, in September 2008, the Fed and the Treasury let Lehman Brothers go bankrupt. What accounts for the different decisions?
Suppose government spending increases in a closed economy. Would the effect on aggregate demand be larger if the Bank of Canada took no action in response, or if the Bank were committed to maintaining a fixed interest rate.
Be sure to include an analysis of the stages of production and describe why of the three stages, only one stage is rational for the firm.
The problem is to choose x to maximize f(x;a) = ax- 3x^2, where á is exogenous, subject to the constraint. Calculate the first-order condition for this problem. For this problem, which values of x are on the boundary, and which are in the interior?
Assume that you have a budget of $30 to spend on milk and cereal only. Graph the budget constraint. Be sure to put the quantity of (Qm) on the horizontal axis. What is the most you can purchase of cereal? What is the opportunity cost of three units o..
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