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1. What shape did the short-run aggregate supply curve have during the 1930s, according to Keynes? Explain2.What is the multiplier? How is it calculated? Why is the multiplier related only to consumption spending?3. What are the macroeconomic consequences of a budget deficit when the economy is operating at full employment? Be sure to discuss the effects in the short run and long run.4.Suppose that the Fed purchases $1 million in bonds in the open market. Explain how the money supply can increase by more than $1 million.5.What happens to the price of bonds when the Fed sells bonds? What happens to the interest rate? What happens to the money supply?
If we believe that the laws of supply and demand always hold, explainc why is it that the 'popular' gifts for the holidays always sell out early?
Using regression analysis, find an equation that best fits the data to represent the TVC function and at what sales/output level will marginal costs (MC) reach a minimum?
At times, people will suggest that the Fed should try and achieve an inflation rate of zero percent. If we assume that velocity is constant, does this goal of zero inflation require that the rate of money growth equal zero.
An inflation shock is a disturbance to the usual behavior of inflation that shifts the IA line. A supply shock is a change in the natural rate of output. Graph the long and short run effects of a positive inflation shock and a negative supply shoc..
Determine the two equal deposits, the first deposit required now and the second deposit at the end of year 6, so that you can withdraw $2,000 at the end of each year for the next 12 years. Assume that money earns 4% interest, compounded monthly. T..
Industry studies often suggest that firms may have long-run average cost curves that show some output range over which there are economies of scale and a wide range of output over which long-run average cost is constant.
In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertise, your rival will make $4 million and you will make $2 million.
Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:
Suppose there is a market for an industrial compound, Weon. This industrial compound is used as an input for production of cleaning agents.
a. Define the Bertrand model and its assumptions. Explain why the model predicts the perfectly competitive outcome despite the number of sellers. Discuss the limitations of the model.
Explain the difference between accounting profit and economic profit. Include discussion of the distinction between explicit and implicit costs and how they relate to economic cost and opportunity cost.
Determine the direction of comparative advantage and the limits to the relative wage rate A and B are the countries, the products are S and T and A has s=6 and T=2, and B has S=15 and T=12
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