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Did monetary policy contribute to the economic crisis of 2008? Why or why not? How did monetary policy makers respond to the crisis? Has their response created an environment for f
A profit maximizing firm has a production function such that: Y=K2L2 a) If P=10,rk=2,andWL=3 , what would be its optimum be? How can you show that it is a maximum? b) How
Explain clearly the liquidity preference theory of interest propounded by j.m.keynes
Can democracy survive if a majority of the citizen pays little or nothing in taxes while benefiting directly from a higher level of government spending? Why or why not?
Two firms, producing an identical good, engage in price competition. The cost functions are c1 (y1) = 1:17y1 and c2 (y2) = 1:19y2, correspondingly. The demand function is D(p) = 80
The price of gasoline has recently come down as has the quantity. Show graphically and explain what might have caused this.
use a graph of the classical labour market to illustrate the effects of a real wage existing in the market that is lower thhan the equilibrium real wage
Define demand-side growth First, demand-side growth is caused by a change in one of the components of aggregate demand. If any of the components enhances (investment, consump
Criticism of keynesian system
Consider the multiplier model we have studied in class. Assume that the economy is initially in equilibrium and that real income is $180. The marginal propensity to expend is 0.66.
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