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Do you think the government, using both fiscal policy and monetary policy, faces any trade-offs in trying to control for inflation vs. unemployment. What do you believe is more of a problem towards long-term economic growth: persistent inflation or unemployment? Make sure to use your readings and what you learned in the modules to justify your arguments.
In an economy, when income increases from $400 billion to $500 billion, consumption expenditure changes from $420 billion to $500 billion. Calculate the marginal propensity to consume, the change in saving, and the marginal propensity to save.
At times, the Federal Reserve tries to change inflationary expectations. Why would the Fed want to raise inflationary expectations? How would this strategy of raising inflationary expectations affect consumption and investment? Be sure to tie your an..
borrow 1000 at t=0. Make exact interest only payments at the end of each year for 4 years and at the end of the 4th year repay the entire principal in addition to the last interest payment. borrow 10000 at t=0. Pay a principal payment each year of 25..
Elasticity.....an important, powerful and, at times, challenging topic. Imagine this: you just won a contest and have been appointed the State Tax Commissioner (you might be asking: why did I enter? and is this a good thing to win?) The State of CT h..
The Gauss-Markov theorem states that OLS estimates are BLUE. List what word each letter in the acronym BLUE stands for. Then, give an intuitive definition for each of these words ?
In the long run, economies are expected to move toward equilibrium at the full-employment level of production. Governments, particularly in democratic countries with frequent elections, often try to use economic policy in the shortrun to improve the ..
Make a list of your human capital. Be sure to point out what occupations, situations where your human capital is valuable. Also, make some statement of the relative scarcity of each of your talents and skills and the wage differential it offers. Keep..
Imagine that you are the chair of the Fed and see that Brexit and other events in Europe during this year will have a negative effect on Europe's economy: what policy would you carry out and why?
Suppose Audrey and Nicky are cousins with a destructive streak. Audrey is 1 year old and has a 10% chance of creating substantial damage in the next year, in which case the expected cost is $2000. Nicky is 2 years old and has a 5% chance of creating ..
Suppose that you deposit $5,000 in a savings account. It has been 15 years and your current balance is $8,376.74. What was the annual compound interest rate?
A perfectly competitive firm sells 10 units of Good X at a price of $2 per unit. It incurs a fixed cost of $5 and a variable cost of $40 to produce the good. Which of the following is true?
Suppose that Alberta imposes a sales tax of 10 percent on all goods and services. An Albertan named Ralph then goes into a home improvement store in the provincial capital of Edmonton and buys a leaf blower that is priced at $200. With the 10 perc..
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