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Find the flaws in reasoning in the following statements, paying particular attention to the distinction between shifts of and movements along the supply and demand curves. Draw a diagram to illustrate what actually happens in each situation.
a. A technological innovation that lowers the cost of producing a good might seem at first to result in a reduction in the price of the good consumers. But a fll in price will increase demand for the good and higher demand will send the price up again. It is not certain, therefore, that an innovation will really reduce price in the end.
b. A study shows that eating a clove of garlic a day can help prevent heart disease, causing many consumers to demand more garlic. this increase in demand results in a rise in the price of garlic. Consumers, seeing that the price of garlic has gone up, reduce their demand for garlic. This causes the demand for garlic to decrease and the price of garlic to fall. Therefore, the ultimate effect of the study on the price of garlic is uncertain.
a powerful leading indicator of overall future economic activity. Elucidate why is it a more meaningful indictor than housing starts.
Elucidate what is the impact of a trade surplus. What is the impact of a trade deficit? How do trade deficits and trade surpluses affect the firm you work for.
After natural disasters, such as hurricanes, some commentators point to 'bright-side'. It is, for example, often pointed out that natural disasters reason GDP for a region to spike upward during the post disaster cleanup.
Explain how would you go about resolving the issue if you were the president of a small, poor country.
As an employee of World Bank you've been asked to research the needs of a country with a particular economic concern.
Explain the law of diminishing marginal utility and Why are there so many more proprietorships than corporations, yet corporations account for so much more of the sales of business firms in the country?
The aspects of your decision-making process fit the description of a rational choice.Did you consider costs and benefits.
Describe the economic situations when your position can be successfully implemented and when it may be doomed to failure.
According to moderate growth your return will be 8 percent. If there is a rapid expansion, your portfolio will return 15 percent.
Explain how does the money multiplier differ when currency holdings are zero, compared to when currency holdings are greater than zero.
A needy family of a mother and three children currently receives cash benefits that average $12 per day. The mother of this family is allowed to earn an average of $4 per day before her benefits begin to decline. After that, for each dollar earned..
Illustrate the process of bringing a new international bond issue to market. What should a borrower consider before issuing dual-currency bonds. What should an investor consider before investing in dual-currency bonds.
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