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Assume that capital is perfectly mobile, the price level is fixed, and the exchange rate is flexible. Now let the government increase purchases. Explain first why the equilibrium levels of output and the interest rate are unaffected. Then show whether the current account improves or worsens as a result of the increased government purchases of goods and services.
a consumer of two goods faces positive prices for both goods and has positive income. her preferences over consumption
Now suppose that the gross national debt initially is equal to $2.5 trillion and the federal government then runs a deficit of $100 billion: i. What is the new level of gross national debt ii. If 100 percent of this deficit is financed by the sale o..
Josh Ritchey has just been hired as a cost engineer by a large airlines company. Josh's first idea is to quit giving complimentary cocktails, wine, and beer to the international flying public. He calculates this will save 5,000,000 drinks
The golden rule capital per worker k^GR is the level of capital per worker that maximizes consumption per worker at the steady state. Write the expression of the steady state consumption per worker c* as a function of k and derive the golden rule ..
How much cloth and food will the economy produce after this increase in its capital supply? Describe how the allocation of machine-hours and work-hours between the cloth and food sectors changes. Do those changes conform with the changes described ..
How do you determine the marginal benefit and marginal cost of the decision? You should illustrate your answer with a numerical example. Why do economists believe that managers should use marginal analysis to make optimal business decisions?
There are two firms in an industry, engaged in Cournot competition. The firms compete repeatedlyin successive time periods. Occasionally, one of the firms is required to produce a certain amount(due to production constraints). This amount is known to..
paid $200 for business cards, $1,000 for a listing in yellow pages, and $250 for an annual business license. She also leased a professional portrait camera and studio lighting equipment by signing an agreeement to pay a monthly lease of $1000 per ..
Firm XYZ measured its MP of labor curve. XYZ produces gadgets that are sold for $20 each and is able to hire workers for $10 per hour. How many hours of labor should XYZ hire each day to maximize its profits.
Based on a sample of 30, suppose we estimate a regression model and find b1=8.4, SSR=128, SSE=286 a) Find the coefficient of determination (R^2) b) Test at the 10% significance level against the two sided alternative the null that B1=0
What quantity minimizes average total cost? What quantity maximizes profit? What price maximizes profit? What is the maximum profit? What is marginal cost when quantity = a, your answer in question 4? What is the socially efficient quantity?
suppose a firms production function is given by q l12k12. the marginal product of labor and the marginal product of
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