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B2. Suppose that consumers become pessimistic about the future health of the economy, and so cut back on their consumption spending. What will happen to aggregate demand and to output? What might the government have to do to keep output stable?
B3. Why and in what way are fiscal policy lags different from monetary policy lags?
B4. Explain the connection between the vertical long-run aggregate supply curve and the vertical long-run Phillips curve.
B5. Suppose that the economy is at an inflation rate such that unemployment is above the natural rate. How does the economy return to the natural rate of unemployment if this lower inflation rate persists?
An open economy has the following pattern of income and domestic expenditure: For each of the three years, evaluate the balance of trade facing the economy.
How will high entry barriers into a market influence (a) the long-run profitability of the firms (b) the cost efficiency of the firms in the industry (c) the likelihood that some inefficient high-cost firms will survive
Describe developing countries and how they differ from industrial market economies. How can international trade aid development?
A bank in a mediumsized Midwestern city, Company X, currently charges$1 per transaction at it's ATM's. To determine whether to increase price,
two u.s. senators made the following argument against allowing free trade fewer and fewer americans support our
You are trying to decide whether to buy some laptop computers for your business in either Canada or in United States. Looking at identical machines on the Dell Canada and the Dell US web sites, you find that they sell for US $2000 (US dollars) in ..
Explain why may a government solution to a marketplace failure worsen the market failure.
Two important policy goals of the government and the Fed are to keep unemployment and inflation low, while at the same time making sure that GDP is increasing at an average of 3% per year. It is important to have the right mix of policies and that al..
The classic prisoner's dilemma involves two suspects, A and B, who are arrested by the police. Because the police have insufficient evidence for conviction on a key charge, they place the prisoners in isolation and offer each.
I am a manager in a governmental agency. I have no control over compensation policy. All workers are paid the same salary.
Discuss three ways in which the Federal Reserve can change the money supply.
Elucidate how does the fiscal policy impact your organization or a selected organization with which you are familiar. Provide two scenarios to show the impact.
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