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Suppose that in Korea the velocity of money is constant, real GDP grows by 6% per year each year, the money stock grows by 9% per year, and the nominal interest rate is 7%.
a) Using the quantity theory of money and the Fisher relation, what should be the inflation rate and the real interest rate in Korea?
b) Suppose the central bank of Korea decides to lower inflation by lowering the money supply growth rate to 8% (all else constant). Now what would be the equilibrium values of inflation and the real interest rate?
Monica and her father own one of the three automobile tire stores in the city. No other city is nearby. They want do develop a strategy increase sales and market share in their city. What steps can they take?
Suppose you are appointed to chair the Federal Reserve. Your twin goals are to maintain low inflation and to stabilize economic activity- that is, to keep output at potential. Why are these appropriate goals for monetary policy?
Unfortunately banks are reluctant to make loans to people who currently have low incomes, even if there is a good chance their incomes will be higher in the future. If people could always borrow as much as they want to, would you expect consumpti..
An American Company that sells consumer electronics products has manufacturing facilities in Mexico, Taiwan, and Canada. The average hourly wage, output, and annual overhead cost for each sit.
marginal revenue exceeds marginal cost, marginal cost exceeds marginal revenue, total cost exceeds total revenue.
1. Suppose the government imposes a tariff on all imports. Use the DD-AA model to an- alyze the effects this measure would have on the economy. Analyze both temporary and permanent tariffs. 2-Suppose there is a permanent fall in private aggregate ..
A firm is targeting 35,000 net monthly profit servicing 2000 cars. What price should the firm charge to realize the targeted profit.
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suppose the chairman and chief executive officer of general motors has decided to a raise the companys auto prices by
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