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Question: Which asks about the intuition of both the AD-AS figures and the I-NS figures, specifically relating them to long-term growth.
Suppose that the economy uses (only) two major inputs in its production: capital (K) and labour (L). Suppose also that we are thinking about long-term growth, specifically through productivity growth.
Now suppose that the Aggregate Demand (AD) remains fixed through this period, and that we begin in long-run equilibrium.
1. If AD remains fixed, and the growth in the economy's productivity occurs, then what would happen to (i) the price level (p), (ii) Real GDP (Y), and (iii) the price of inputs (L & K) in the economy? Explain your answer using the AD-AS model.
Review the article and present your thoughts regarding the impact of this event/situation on the Canadian economy - What does it mean for the future?
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Assume you run the central bank of a small open economy with fixed exchange rates. Output, unemployment and inflation are where you want them to be.
1. What is Douglas Fur's fixed cost? 2. What is the ATC in the short run when 4 pairs of boots are produced? 3. Douglas fur is thinking of increasing its production from 3 to 4 pairs of boots. What would its MC be?
Suppose that the annual inflation rate is at 2% and 8.5% of the labor force is unemployed. If you were on the Federal Open Market Committee
Increased production levels in this industry during the first three quarters this year led industry experts to believe that the industry contribution to Indonesia's GDP would also increase.
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Your boss asks you to do fundamental analysis of a corporation. What value is she asking for and how would you estimate this value?
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