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Explain, using the best framework you can think of (based on our class discussion), the effect of a large federal deficit on interest rates.
compute: credit multiplier, maximum change in the money supply
Describe in detail about Exchange rate systems Various countries have different exchange rate systems. The most significant characteristic of an exchange rate system is to what
Let the real interest rate, i r , equal 5 percent and the rate of depreciation, d, equal 10 percent. In this case, if the price of a piece of capital is P K = $10,000, what is th
Between 2007 and 2009 the U.S. economy experienced a severe recession. In an effort to stimulate the economy, the federal government passed a stimulus package. Explain the federal
The circular flow of income in an open economy An open economy is one in which international trade exists. Assume also that there is government spending and taxation. Thus
What would happen to the US market of new homes, if Bank of America raises interest rates, from 1% to 3%?
1. Suppose the demand for a product is given by QD = 2000 - 25P. a) Calculate the Price Elasticity of Demand when the price is $30. b) What price should the firm charge if it
The consumer price index for the 1978-82 periods and the GDP deflator follow. This was a period of unusually high, but declining, inflation. (The CPI is equal to 100 in the base ye
The director of admissions at Kinuza University in Nova Scotia estimated the distribution of student admissions for the fall semester on the basis of past experience. What is the e
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