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In 1999 Mercedes-Benz USA adopted a new pricing policy, which it called NFP (negotiation-free process), that sought to eliminate price negotiations between customers and new-car dealers. An article in The New York Times (August 29, 1999) reported that a New Jersey Mercedes dealer who had his franchise revoked is suing Mercedes, claiming that he was fired for refusing to go along with Mercedes' no-haggling pricing policy. The New Jersey dealer said he thought the NFP policy was illegal Why might Mercedes' NFP policy be illegal? Can you offer another reason why the New Jersey dealer might not have wished to follow a no-haggling policy?
Q. Explain the problem with IS-LM model? The starting point of AS-AD model is an assumption in IS-LM model (and in the cross model) that limits its usefulness. This is an assum
A government purchase real GDP. Are increases in government purchases associated with increases in real GDP?Describe the important characteristics of perfect competition and monopo
Q. Explain AS-AD model and inflation? Even though AS-AD permits changes in the price level, it doesn't allow for persistent inflation or deflation. We can't have continued decr
What are the Responsibilities of central banks Responsibilities include providing banking services to commercial banks and the government and regulating financial markets and i
This release also states that the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. Additio
The data is posted on Blackboard. Download the data lfs4.dta on your personal computer. This data is from the Labour Force Survey 2003. In STATA, add enough memory to open the data
HOW MARRIAGE AFFECTS GDP
How can we define the real wage as nominal wage We define real wage as nominal wage divided by a price index (typically CPI). In the illustration above, your real wage was 20 i
1. You are managing a breakfast and lunch only restaurant that sells all-inclusive plated meals (i.e. all lunches include any protein or hot foods as well as salads and sides on a
Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively. The government decides to impose a p
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