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For each of the following events, consider how you might react. What things might you consume more or less of? Would you work more or less? Would you increase or decrease your saving?
a. You have a very close friend who lives in another city, a 3-hour bus ride away. The price of a round-trip ticket rises from $20 to $45.
b. You receive an award that pays you $300 per month for the next 5 years.
c. The price of food doubles.
Explain the impacts of an expansionary fiscal policy such as a tax cut on the levels GDP, Consumption, Investment, interest rate and unemployment and price.
Illustrate what special problems are faced by eastern european economies as they make the transition from central planning to competitive markets.
Describe briefly why time lags in discresionary fiscal policy can adversely affect the efforts.
Illustrate the stated direction of recent monetary policy. What recent actions have the Federal Reserve taken to confirm that direction
What is the business cycle and how is it linked to a secular trend? Describe each of the four phases of the business cycle and indicate how they a linked to the concepts of a "boom", a "recession" and an "expansion".
Question based on Derive and compare demand curve, Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?
Use the following Information on a hypothetical short-run production function to answer questions a-c. Calculate the marginal and average variable product of each unit of labour input.
As per fiscal policy makers increase the budget deficit, monetary policy makers should increase the money supply
Discuss the upshot of this policy in terms of a new equilibrium. Is this policy likely to have a negative repercussion on the crime rate? Can you come up with an idea concerning a major drawback of this policy?
Illustrate what kinds of changes in underlying conditions can cause the supply and demand curves to shift
Estimate the relationship among inflation,unemployment and business cycle on the industry.
Elucidate the importance of competition among firms. Explain whether the competitive environment in this industry benefits society or not.
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