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An economy begins in the long run equilibrium, and credit card companies start offering cash back on every purchase.
This policy change makes holding money less attractive.
a. How does this change affect the demand for money?
b. What happens to the velocity of money?
c. If the Fed keeps the money supply constant, what will happen to output and prices in the short run?
d. If the goal is to stabilize the price level, should the Fed keep the money supply constant in response to this regulatory change? If not, what should it do?
Explain Alfred Marshall's theory of a long run (long period) competitive equilibrium (the theory still used to this day to explain the long-run outcome of perfectly competitive markets).
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q1. if the annual real interest rate on the loans is 6 explain how many car companies will buy a new car assembly
Specific assets can create problems for a company. If a supplier invests in new machinery to deliver a part useful only to its biggest and best customers, it can find itself with:
For each case below, please state if the person mentioned is unemployed for Frictional, Structural, or Cyclical reasons. Please state your reasoning for each answer.
Which of the following is viewed as a fundamental building block of the U.S. economic way of thinking?
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Consider the market for coffee beans. Suppose that the prices of all other caffeinated beverages go up 30% while, at the same time, a new fertilizer boosts production at coffee plantations dramatically. Which of the following best describes what is l..
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