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1 (a) List two concerns with inflation. (b) Suppose that we are in a condition of fully flexible prices, but production of nails will not go above 200 chairs/month. What price w
Assuming an economy with no government and no foreign trade. Measure GDP for the following output scenario: There are three firms: firm A is a minning company, firm B is a stee
Question 1 What would be the effect of an increase in Australia's net exports on the aggregate demand curve? Would an increase in net exports affect the RBA's monetary policy
The market for quits is initially competitive and the market demand is: P=400-0.4QD. The Combined marginal costs of the firms in the quit industry are: MC=50+0.6Q. a. Draw the
Q. Money market in the AS-AD model? goods and the money market in the AS-AD model We begin by studying goods market and money market when prices are no longer constant. Fi
I''m trying to figure out what the effect would be on LM or IS curve, and additionally the interest rate and income if (a) the transactional demand for money increases, (b) the liq
A significant argument for the augmentation has to do with concept of money illusion. Money illusion means that you care about nominal rather than real amounts. Imagine that your s
Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 12% and a standard deviation of 17%. B has an expected rate of return of
When a government spends more than it receives in taxes; it runs a budget deficit, which is generally covered by issuing debt obligations to domestic and/or international investors
What impact will high and variable rates of inflation have on the economy? How will they influence the risk accompanying long-term contracts and related business decisions?
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