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How is the aggregate supply curve different from the supply curve for a single good, like pizza? Describe determinants and give an example of a change in each.
Draw a graph showing equilibrium in the money market. Carefully label all curves and axes and explain why the curves have the slopes they do.
Use aggregate demand and supply analysis to explain how high oil prices could reduce real GDP.
Why does the aggregate demand curve slope down? Give real-world examples of the three effects that explain the slope of the curve.
Draw and label an aggregate supply diagram that illustrates the effect of the change in each determinant.
Now draw a long-run aggregate supply curve that intersects a short-run AS curve. What is the relationship between short-run AS and long-run AS?
Draw and carefully label an aggregate demand and supply diagram with initial equilibrium at P0 and Y0. How is the short run different from the long run?
How can the short-run aggregate supply curve ever lie to the right of the long-run aggregate supply curve?
Using an aggregate demand and aggregate supply diagram, illustrate and explain how increase in real GDP could occur.
In what ways are government deficits harmful to the economy. Define and give three examples of automatic stabilizers.
Why will real GDP tend to rise when government spending and taxes rise by the same amount?
Why do government budget deficits grow during recessions? Define each and briefly offer an argument for why income taxes are usually progressive.
Describe the four functions of money using the U.S. dollar to provide an example of how dollars serve each function
Why are informal financial markets used in developing countries? Give an example of an informal financial market.
What factors could cause the actual expansion of the money supply to differ from that given by the deposit expansion multiplier?
The Federal Reserve System divides nation into 12 districts. List the 12 cities where district banks are located. Which Federal Reserve district do you live in?
Describe the quantity theory of money, defining each variable. Explain how changes in the money supply can affect real GDP and the price level.
What is the maximum loan that First Bank can make, and what is the maximum increase in the money supply based on First Bank's reserve position?
Explain why senior citizens often obtain special price discounts. What policy would the movie theater implement to increase total revenue?
Compare a ban on trans fats to a ban on cocaine. What do the markets look like? How are they different? Which ban would be easier to enforce? Explain.
What government policies might be used to reduce poverty most effectively? Explain what is meant by the term discrimination.
What would the curve look like if income were equally distributed? Why does the health of the economy affect the number of people living in poverty?
Explain what it mean when the supply of television set rises? Explain how price of television sets could rise, and yet the supply of television sets not change.
The price of an evaluation of a food product could run as much as $20,000. What impact do you think this law will have on the market for meat?
During China's Cultural Revolution in the late 1960s and early 1970s, many people with a high school or college. What does this policy say about specialization?