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Discussion 1: Even without a minimum wage, the unemployment rate would almost surely be higher among teenagers than among adults. What aspects of economic theory would lead to this outcome?
Discussion 2: Consider two situations. In one you find yourself in the 90% income tax bracket and in another you are in the 10% income tax bracket. Would your incentive to find loopholes to reduce your tax liabilities be the same or different in these two situations given that your income is the same in both cases? Explain your answer. Does this have anything to do with the Laffer Curve?
Discussion 3: In most cities in the world, it is necessary to purchase an expensive license - called a medallion that have fixed number in supply - to operate a taxi. These medallions allow you to do your business and if you wish you can sell them and leave the taxi business. Would you expect the resale price of those medallions to rise of fall in the future? Why?
Discussion 4: Suppose there is a decline in the marginal costs for one member of a cartel. What impact will this have on the incentive of that firm to cheat on the cartel agreement? What impact will it have for the stability of that cartel? Explain
Why might it be difficult for the Fed to formally adopt inflation targeting? Would inflation targeting be a good policy for the Fed in the present economic environment
In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?
Describe the present economic crisis situation in Europe. Why has it been so difficult for the Europeans to find a solution to this problem? Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..
Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.
Question based on Derive and compare demand curve, Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?
Problem based on Utility Function - Problem, Answer and explain the following using a diagram which is completely labeled.
Question based on Laffer Curve : Tax Rate and Tax Revenue, Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?
Problem - Income Elasticity of Demand, Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5
Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."
Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.
Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?
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