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The principal method used by the Federal Reserve to change the money supply is through open-market operations. Use the aggregate demand-aggregate supply model to illustrate graphically the impact in the short run and the long run of a Federal Reserve decision to increase open-market purchases.
Be sure to label:
i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curves shift; v. the short-run equilibrium values; and vi. the long-run equilibrium values.)
State in words what happens to prices and output in the short run and the long run.
Suppose the demand curve for a product is given by Q = 300-2P+4I where 'I' is average income measured in thousands of dollars. The supply curve is Q = 3P - 50.
Show these data graphically. Upon what specific assumptions is this production possibilities curve based? What would production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a lev..
Those who advocate that the Federal Reserve target monetary aggregates usually argue that the Fed should not alter its monetary targets in response to temporary changes in macroeconomic conditions
Provide brief but theoretically sound explanation for each of the following.
Jermaine has a health insurance policy that has a deductible of $1,000, a $10 copayment on doctor visits, and coinsurance of 10% on all expenses other than those for which there are copayments.
How many "spells" of unemployment occur each year in this economy? What percentage of the "spells" are only one month long?
Explain why user cost, or scarcity rent, arises in the intertemporal allocation of a depletable resource such as minerals, and some types of energy and aquifer water resources.
Mention the four assumptions for the Monopolistic competition model.
Assume that Florida migrant workers are effectively unionized. What will be the impact of unionization on?
There are 10 identical firms that have the common cost function c(y) = y 2 + 9. The industry demand function is given by X (P) = 200/
What are the FC, ATC, AFC, AVC and MC at these output levels?
Discuss the advantages and/or disadvantages of distributing marketable pesticide permits to each farm operating in the watershed equal to 40% of its current level of use of that pesticide, versus simply ordering each farm to reduce pesticide use t..
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