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Calculate the marginal product of labor. Does this production function exhibit diminishing marginal product of labor?
Explain how an equilibrium factor price is established in a factor market if there is either an excess demand for the factor or an excess supply of the factor.
What are factor prices? What classical assumptions are used in explaining how they are determined? Explain each term in the profit function for a firm.
Explain each term in the profit function for a firm. What rule do firms follow to determine how much of each input to hire in order to maximize profits?
What are supply shocks and from what sources can they arise? Distinguish between positive and negative supply shocks.
What relationship does the aggregate production function portray? Which of the production function's variables are endogenous and which are exogenous?
What is the level of aggregate spending in Pandora according to the quantity theory of money? What is the effect on the velocity of money?
Assume that you are interested in earning some return on idle balances you. Comment on the effect of your action (everything else the same) on M1 and M2.
Most of the time it is quite difficult to separate the three functions of money. Identify which function of money is emphasized.
What is hyperinflation? What has been the main cause of hyperinflation episodes? What are the costs of anticipated and unanticipated inflation?
How is the quantity theory of money converted into a theory of inflation? According to this theory, what determines the inflation rate?
Describe the three primary functions money performs in an economy. What are the M1 and M2 monetary aggregates?
Assuming the United States is a large open economy, explain how a decrease in investment will affect equilibrium world interest rate and the U.S. trade surplus.
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows.
What would be the effect of an autonomous decrease in investment on the trade balance?
Calculate Japan's investment if net exports are 1% of GDP. Calculate Japan's exports if imports are valued at $650 billion.
Calculate India's output growth for 2009. What is the contribution of productivity growth to total output growth (in percentage terms)?
What are the four basic results of the Solow growth model? What is the model's chief weakness?
What are the two determinants of the steadystate level of capital per worker? Why does capital per worker move to this steady-state level?
In the per worker production function, what determines level of output per worker? Which one of these factors does Solow growth model consider to be exogenous?
Using the money multiplier model, describe how banks' behavior affected the excess reserves ratio, the money multiplier and the money supply during this period.
Discuss what would be the effect on the monetary base and the money supply of an increase in discount loans that are kept in the form of excess reserves?
The Federal Reserve announced reduction of many lending facilities originally created. What would be the effect of the closing of the TAF on the monetary base?
What would be the effect of a rumor about a banking crisis on checkable deposits in such a country? What would be the effect on reserves and the monetary base?
Use the Fed and the banking system T-accounts to describe effects of a Fed sale. What would be the effect of this transaction on the Fed's monetary liabilities?