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THE AD CURVE SHIFT TO THE LEFT WHEN
Suppose the banking system has reserves of $750,000, demand deposits of $2,500,000 and a reserve requirement of 20%. a) If the Fed now purchases $125,000 worth of government bon
Kate uses a sewing machine to alter and repair clothes for one year in her own small business, Kate's Tailoring. She earns $20,000 during the year for various sewing projects. In t
The Budget Line: The Consumer Constraints The consumer would like to maximize his satisfaction by reaching the highest possible indifference curve. But in the process, he faces
State the both -Cyclical and Classical unemployment Cyclical unemployment Unemployment because of a recession. Classical unemployment Unemployment because of
The inhabitants of Fantasia live for two periods, 0 and 1. They consume a nonrenewable resource called Fantasium in each period. Fantasium has to be extracted from the ground and t
If interest rates increase, which would you rather be holding, long term or short term bond? Why? Which type of bond has the greater interest rate risk?
Suppose that in the United States a car can be produced with 200 labor hours, while a ton of rice requires 20 labor hours. In Japan, it takes 150 labor hours to make a car and 50 l
Public policies often alter the costs and benefits of private actions. Why is it important for policymakers to consider both the direct and indirect effects of public policies? Sel
determination of interest rate in classical model
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