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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 of tax-revenue as the income taxes it replaces. Is this a good idea? Why or why not?
You work for a Stock Brokerage Company (S). As part of its sales incentive program, S awards points to its salespeople for sales they make. These points can then be cashed in for vacation trips. S owns 20% of a certain fund group (M), and S's ownersh..
What is the difference between the Federal Funds Rate and the Discount Rate? Please explain the difference by providing an explanation of each rate and their purposes. Is there anything else that the Federal Reserve can do to change the supply of mon..
Home and Foreign both produce cars and food using labor and capital. In each country, labor and capital are both freely mobile across industries. It takes 5 units of labor and 3 units of capital to produce 1 unit of food, and 4 units of labor and 4 u..
Suppose that initially the economy is in a long-run equilibrium with no money growth, no inflation, and πe = 0%. Then, the central bank announces that, starting in the next period (t+1), the money supply will begin growing at 10%/period. What happens..
If the quantity of output demanded at every price level increases by $1 trillion, Illustrate what happens to equilibrium output also prices.
Consider again the case analyzed in class with two sectors exhibiting constant returns to scale technology (sector A is capital intensive and sector T is labor intensive). Suppose there is a neutral technological change in sector T only (no technolog..
What are the four phases of the business cycle? Why is it difficult to distinguish between frictional, structural, and cyclical unemployment? Why is unemployment an economic problem? What are the consequences of a negative GDP gap? What are the nonec..
Explicates how every of these public polices involves demand for cigarettes by teenagers.
Elucidate the likely impact of this event on the market for gasoline and the market for small cars.
Should we remove all barriers to immigration into the United States? What would be the outcome? If we could let in an extra hundred thousand immigrants every year, should we favor certain immigrants over others? Why?
When Satelite Glass switched from hourly wage to piece rate, what happened to the workers' productivity? What are the sources of this productivity change?
What are the similarities between the Great Depression and the Recession of 2008 and differences between them, and to what extent did government intervention both initiate and resolve these economic difficulties? Lastly, what are the lessons to be le..
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