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In a labour market model, we shall assume that the economy is always on the wage-setting curve and only on the price-setting surve in the medium- run equilibrium. How would this model react to a demand shock as opposed to having the economy always on the price- setting curve and only the wage-setting curve in the medium run equilibrium?
Suppose the Council of Economic Advisors (CEA) hired you as an Economist (Economic consultant). The head of the council tells that she believes the current unemployment rate of 9% is too high. They would like to increase real aggregate output (RGDP)...
If it would be cheaper to give each steelworker $375,000 per year in cash rather than impose restrictions on steel imports, why do we have the import restrictions rather than the cash payments? Who gains and who loses from import restrictions? In ans..
In a recession, consumers have less income to spend. As a result, if dining out is a normal good, then which of the following would happen to the demand curve for dining out?
How does an intertemporal Budget contraint look assuming a progressive tax rate are there kinks?
Where Q is the number of cuts per week and P is the price of a hair cut. Terry is considering raising her price above the current price of $15. Terry is unwilling to raise price if the price hike will cause revenues to fall. Should Terry raise the pr..
When a single-price monopolist maximizes profits, price is greater than marginal cost. This means that buyers would be willing to pay more for additional units of output than the unit costs to produce. Given this, why doesn’t the monopolist produce m..
If your holding period is 1 year i.e., you have to sell this bond after one year, what price will you end up selling at. Show your work. What is your effective rate of return.
Senator Wallbuilder has been quoted as saying, “We’ve got to stop immigration into the United States. These foreigners take jobs away from Americans and put them on welfare. I can’t think of a single good thing about immigration. Let’s keep America f..
If the function of total costs of a business comes from: TC(q)= 3q3-54q2+500q+2595
Compare the after-tax annual costs and decide whether Machine A should be retained or replaced by Machine B. Use a 10% after-tax rate of return.
Suppose you have the following regression equation where PROD = output produced per month, LHR = labor hours paid per month, and QUAL = quality of raw materials purchased within the month, and T=trend variable: Prod = ß0 + ß1LHR + ß2QUAL + ß3T. If ß3..
If a country wants to fix its exchange rate at a rate that is higher than the market rate, what monetary or fiscal policy must it use? If a country wants to fix its exchange rate at a rate that is higher than the market rate, what monetary or fiscal ..
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