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1. Aggregate Supply (AS) and Aggregate Demand (AD) model and AS/AD curves are essential to understand macroeconomic fluctuations (business cycles).
Discuss the importance AS-AD model in explaining the macroeconomic conditions of the economy and business cycles like recessions.
What factors shift AS and AD curves? How do you explain macroeconomic fluctuations using AS-AD model and AS/AD curves?
2. Macroeconomic goals and macroeconomic equilibrium are the key elements in macroeconomics.
What are the long-run macroeconomic goals? What is long-run macroeconomic equilibrium? How the goals are relate to the macroeconomic equilibrium?
Suppose that consumers and investors become pessimistic about the future health of the economy. What will happen to aggregate demand and to output?
Explanation and Analysis The student will correctly identify changes in market conditions and their effect on equilibrium price and quantity. In the market for dental services, perform the following for each event:
A consumer has a budget of $250 to spend on electricity and food. The price of food is $1. Initially, the price of electricity is 10¢/KwH (kilowatt hour). However, in order to discourage excessive use of electricity and promote conservation, the Publ..
During the mortgage crisis the destabilizing effects of defaulting mortgages quickly spread throughout the financial system because those mortgages were involved in widespread securitization. What is securitization?
For the past several years, in order to sustain sales and profit growth, Harley has relied heavily on baby boomers to buy motorcycle in an effort to recapture their youth and rebelliousness. However, that market segment is quickly aging out of mainst..
1. Define business cycles. How is national debt affected by business cycles?
Suppose that you are trying to determine whether OPEC is an effective cartel. Discuss how you would go about distinguishing between the following models if you could observe market prices, output levels for individual countries, and the short run mar..
An advertising campaign will cost $ 200 000 for planning and $ 40 000 in each of the next six years. It is expected to increase revenues permanently by $ 40 000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient wit..
Explain four problems with the argument that trade protection is needed to protect American jobs. b) Describe the economic reasons why businesses use off shoring.
A firm has demand function Q=10 -P. The firm has constant long run average costs of production equal to $4. The firm must sell each unt of output for the same price per unit, and the firm must produce and sell an integer amout of output. Calculate pr..
When the US. Treasury sells bonds, the money supply does not increase, while when the Central Bank sells bonds, the money supply contracts. Explain why?
Understanding the Marketplace and Customer. Assume your good (paper towels) has both a consumer and a business market. How will you market these, based on the different decision processes of each market?
Bundling helps the seller to increase profit by ________.
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