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In 2009, ABC Company made $2M of net profit and spent $100,000 on advertisement. In 2010, it made $2.5M of net profit and spent $150,000 of advertisement. Based on this information, if ABC's advertisement expenditure increases by $20,000 in 2011, how much do you expect its net profit to increase? Explain why the ratios of net profit to advertisement expenditure in 2009 and 2010 are different from the slope of the net profit advertisement relationship.
Granting a loan: When commercial banks lend, they create money. This can be explained by extending the hypothetical example of Bank
How does the Ricardo Viner diagram react when once price changes, effects on real wages, and labor allocation?
Relationship between the interest rate and the bond price Note that the higher the issue price, the lower the interest rate. Similarly when the price of a government bond incr
(40 points) Consider two consumers, A and B. A and B both want perfect consumption smoothing (c = cf) and both have no current wealth. However, the two consumers have different inc
what is the difference between classical and non-classical model
what is the company lidted in NASDAQ that is included in the dow jones industrial average
Suppose the economy is currently in recession, and the exchange rate if fixed using the IS-LM model. a) Explain and illustrate the economy adjustment (in the medium run) b) E
The consumption function of an economy is given by c = 200+0.75(y-t) And the investment function by I = 200 = - 25r. Government purchases G and taxes Τ are both 100. T
You have a choice between a lottery lump sum payout of $10,000,000 today or a series of 25 annual annunity payments the first payment will be one year from today ad a discount rate
Define the monopoly of Central banks The central bank has a monopoly on issuing currency, it is in complete control of the monetary base. In section 7.4.2 we will describe exac
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