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During the Great Depression, the price level fell during some years.
a. With a falling price level, what happens to the actual real interest rate? Does your answer depend on what happens to the nominal interest rate? Briefly explain.
b. In contrast, during the 2007–2009 financial crisis, nominal interest rates on Treasury bills were close to zero, and inflation remained positive.
What was the actual real interest rate on Treasury bills during this period?
c. Why would savers be willing to hold Treasury bills with a negative real interest rate?
Question based on Derive and compare demand curve, Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?
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Suppose last year's real GDP was $10,000 billion, this year's nominal GDP is $13,800 billion, and GDP-deflator for this year is 110. Determine the growth rate of real GDP?
How will the programs proposed affect future growth possibilities for the economy (how will they effect the PPF and long run aggregate supply)?
Would you assume this as an externality, and if you do, what would you suggest be done about it.
Sandle Corporation, an accrual-basis, calendar-year taxpayer, sold $15,000 of its products on account to Jim in November, year 1. In year 2, Jim declares bankruptcy and Sandle writes off the account as a bad debt.
Answer the following questions on the basis of the monopolist's situation illustrated in the following graph.
Consider city of Silver Spring, where zoning laws limit the number of video arcades to one. The city only video arcade has a price of $.50 a game with an average cost of $0.34 a game.
As an economist, you have been asked to address a meeting of a group of international professionals to explain the differences between microeconomics and macroeconomics and to provide real-world examples.
The ability for economy to eliminate any imbalances in actual and potential output is sometimes called self-correction. Using an aggregate supply and aggregate demand diagram,
The Rusty Anchor Bar has two-types of patrons: legal and underage drinkers. Even though it is illegal to allow entry to underage drinkers, there is no perfect way to identify underage drinkers since they often use fake identification card.
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