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Suppose the inflation rate in an economy is observed to be falling. Sketching an AS/AD model for each case, determine which of the following phenomena could be the cause. (There may be more than one.)
a. The federal government gives households a substantial tax cut
b. Agricultural harvests are particularly good this year
c. Businesses are confident about the future and are buying more equipment
d. The Fed is trying to move the economy toward a lower long-run inflation rate
A highway department is trying to decide whether to patch a section of roadway or completely resurface the section. Patching will last two years and require 300 cubic yards of material that costs $700 per cubic yard and $24,000 to improve the roadway..
Why might convertibility be important for the establishment of paper money? Would you expect it to remain as important if the paper money has the status of legal tender? Explain why or why not.
How Social Capital enhance well-being in high density community?
Suppose, if ill, your demand for health services is summarized by the demand curve Q = 50 – 2P, where P is the price of services. How many services do you buy at a price of $20? Suppose that your probability of illness is 0.25. What is the actuariall..
The investment will earn a 5% rate of return. Should the firm add the addition? Explain.
Two firms are considering going out of business and selling their assets. Each considers what happens if the other goes out of business. The payoff matrix below shows the net gain or loss to each firm.
Explain using a production possiblity curve (PPC) diagram, the economic problem of scarcity, choice and opportunity cost.
Cross-Price Elasticity. The South Beach Cafe recently reduced appetizer prices from $19 to $9 for afternoon “early bird” customers and enjoyed a resulting increase in sales from 90 to 150 orders per day. Beverage sales also increased from 398 to 685 ..
Centralized federal regulation has the advantage of?
What is the formula used to calculate marginal product of food and manufactures.
Explain why Sunk costs should not be included in a capital budgeting analysis, but opportunity costs and externalities (the effects on other areas of the firm),
The student chapter of the American Society of Mechanical Engineers is planning a six-day trip to the national conference in Albany, NY. For transportation, the group will rent a car from either the State Tech Motor Pool or a local car dealer. The Mo..
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