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Problem Set 6
Why is it possible to change real economic factors in the short run simply by printing and distributing more money? Explain why a stable 5% inflation rate can be preferable to one that averages 4% but varies between 1-7% regularly.
Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases the money supply by 6%.
Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%. Now assume that the central bank increases the money supply by 6%.
Suppose a country enacts a tax policy that discourages investment. As a result, the value of the parameter ¯s now goes to a smaller value ¯s? Assuming that the economy starts at its initial steady state, use the Solow model to explain what happens to..
What is the unemployment rate Will a high unemployment rate cause deflation What is the current structure of the labor market How does the current structure affect the threat of cost push inflation or deflation
suppose nominal gdp in 1999 was 100 billion and in 2001 it was 270 billion. the general price index in 1999 was 100 and
Consider the utility-maximizing model in a two-good world, where our representative consumer has well-behaved preferences that result in smooth indifference curves that are convex to the origin. Place good one on the horizontal axis. (Assume I=$120 a..
A monopolist produces the quantity at which MC
How the Birth Dearth Saps Economic Growth - Is this article an example of a Public or Private failure
problem 1nbsp consider a linear model to explain monthly beer consumptionwrite the transformed equation that has a
why are banks able to maintain reserves that are only a fraction of the demand and savings deposits of their customers?
What does this change show about how our understanding of the way the price system works to allocate resources has evolved? If "excess profits" are taxed away, where will oil companies get the money to fund new exploration and ..
Develop a preliminary set of arguments you will present and anticipate the counter-arguments you can expect to encounter; make a list
What would efficient revenue management imply for the pricing of the Cowboys Stadium parking lot on typical game days? How about for the Super Bowl? How about for the many smaller events that fill less than half the lot?
Suppose the Fed reduces the money supply by 5 percent. What happens to the aggregate demand curve? What happens to the level of output and the price level in the short run and in the long run? According to Okun’s law, what happens to unemployment in ..
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