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The short-run supply of a certain crop is perfectly inelastic, because it has already been harvested and no more of it can be grown until the next growing season. In order to raise the price received by farmers, the government orders the destruction of a percentage of the harvest. Does this action result in a deadweight loss? Why or why not? Assume that the cost of distributing the crop to consumers is zero.
The AS-AD model with inflation When we remove assumption of constant prices to allow varying real wages. Resulting model was known as AS-AD model. Similarly we now remove the a
Each Home Depot store must decide how much paint to order each month. From historical records, they know that the amount of paint they sell during May is distributed as follows: th
An experiment is explained by an exponential random variable with mean ? and x1 and x2. A proposed test of the hypothesis ?=2 next to the alternative ?=½ uses the critical region {
Let a macroeconomic model be of the following form: C = a + bY D a = 10 T = T 0 b = 4/5 G = G 0
For an interest rate of 12% per year compounded continuously, find (a) the nominal rate per year, (b) the nominal rate per quarter, (c) the effective rate per quarter, and (d) the
Assume that the economy is characterized by the following structural equations: C = 160 + 0.6 (4 - T) I = 150; G = 150; T = 100. a) Determine the equilibrium output level
The rate of interest in the UK also showed very interesting results, to an impulse shock on oil price. The middle left graph from Fig 4.4 shows the results. Initially, in the short
(A) What is the difference between a movement along a demand or supply curve and a shift of one of these curves? Why is it important to distinguish between the two? What mistake
The market demand for a factor The market demand curve for any input is not simply the horizontal summation of the individual demand curves of all the firms. This is due to th
what is the importance of credit multiplier
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