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Q1. Why do proponents of active policy recommend government intervention to close an expansionary gap? Briefly discuss.
Q2. Why might an active policy approach be more politically popular than a passive approach, especially during a recession?
Q3. Some economists argue that only unanticipated increases in the money supply can affect real GDP. Explain why this may be the case.
Q4. What is the policy credibility and how is it relevant to the problem of reducing high inflation? How is credibility related to the time inconsistency problem?
Explain how does this affect the supply of beef. Explain how does it affect the supply of beef worldwide.
How many acres should John choose to mow in order to maximize profit. Prevailing market price of lawn mowing is $20 per acre.
The Central Bank of Muji wishes to eliminate the recessionary gap while expansionary monetary policy. The central bank can do so by stimulating consumption and planned investment.
Describe how the system converges to its new equilibrium. What happens to the equilibrium wage in the long run? What happens to the equilibrium population size in the long run?
Suppose the market for wheat is perfectly competitive. Fed up with low prices, a wheat grower in Texas decides he won't take his output to market and, instead, dumps all his wheat into the Red River. What happens to the market price of wheat?
Suppose that the average total cost (ATC) of producing 8 units is less than the average total cost of producing 9 units. What can we say about marginal costs (MC) in relation to ATC?
Congresswoman Gaga represents a state in which several firms fabricate furniture. She needs to impose tariffs on all imported furniture.
The blue line circle symbols is a demand-for-money line and the orange line square symbols is a money supply line.
Write down an expression for the profit GBC will make if it uses L units of labor at $1 an hour and sells the resulting output of cookies at $p a cookie.
Suppose each monopolist is allowed to sell both domestically and export the good. At what price will the good be traded? What quantity will each firm sell domestically and what quantity will it export?
What is expected salary of a CEO who has been with company for years. Construct a 95% confidence interval on prediction for average CEO who has been with company for 10 years.
Elucidate how much profit will it earn at that output rate. If the marketplace price dropped to $10, illustrate what should the firm do.
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