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Q. Governments often complain about one another's macroeconomic policies. This question asks you to analyze one example.
a) During the late-1980s depreciation of the dollar, the United States pressured Germany to lower its interest rate. Explain why the United States might have wanted the German interest rate to be lower (that is, what would the likely effects on the U.S. economy be?). Be sure to include an appropriate graph with your explanation.
b) Germany sometimes responded to U.S. pressure by telling the United States to raise its own interest rate. Might the United States have achieved the same result from raising its own interest rate that it hoped to achieve from Germany lowering its? Compare the effects of the two policies, based on the models developed so far in the text. Why might the United States have preferred one policy over another?
Compare the competitive price charged and quantity produced under perfect competition and monopoly. Other than identifying the presence of only one producer under monopoly, why do we tend to see this differential.
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One of the three ADM executives was actually an informant who tipped off the Feds about this conspiracy. Which executive was he. Why did he rat out his co-workers.
Suppose the point of tangency that characterizes long-run equilibrium for a monopolistically competitive firm occurs at Q1 units of output.
Explain what occurs when a new technology makes another one obsolete in terms of economic profit.
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Some economists argue that only unanticipated increases in the money supply can affect real GDP.
Suppose that the supply curve of healthcare services is perfectly inelastic. Analyze the impact of an increase in consumer.
Suppose she is offered a new job that would pay her $15,000 and would bring her earnings high enough so that she no longer qualified for any welfare benefits.
Calculate the price elasticity of demand for Newton's Donuts
Why the short-run demand for gasoline is less elastic than the long-run demand, when the price of gasoline rises, people immediately cut back on unnecessary trips.
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