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Q. Define Effective exchange rate? Suppose that we are interested in external competitiveness of a country, let's say Japan. To do this we could look at evolution of a particul
Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of real GDP demanded for ea
Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for t
1. Which function of money is disrupted as a result of high inflation? Why? 2. The central bank of Fiji has issued $1,000,000 in Fijian dollars. What is the size of m
(Effects of Fiscal Policy) Recently some legislators have called for tax increases to reduce the federal budget deficit. Conservatives have countered that such tax increases could
Because the structure of the personal income tax is progressive, a larger share of income is taxed at higher rates as real income increases. Therefore, economic growth automaticall
Two animals are fighting over a prey. The prey is worth v to each animal. The cost of fighting is c1 for the first animal (player 1) and c2 for the second animal (player 2). If the
What is the opportunity cost of economic growth? Opportunity cost measures the cost of an economic option within terms of the next best option foregone. The government of a
explain and illustrate how the Lm curve is derived.
Use a diagram of the open economy model (e.g. fig 32.4 from the text) to illustrate and explain the effect of the following event on the market for loanable funds, the level of net
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