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Do firms in oligopolistic industries have an incentive to collude? What factors will reduce the likelihood of successful collusion?
How much would sales have to increase in order for the firm to earn a monthly profit of $5,000? {Hint: Remember fixed costs will not vary with output.)
Should grocery stores be required to locate in unprofitable areas? Why or why not? How do you tell who has a public service responsibility and who does not?
What are the major sources of monopoly? Can a monopolized industry sometimes be transformed into a competitive industry?
Outline the major problems involved in regulating the activities of a monopolist. Why is the regulatory function likely to become a source of economic inefficie
Be specific in your policy suggestions. Indicate why you believe that they would be an improvement over the current system. Spend some search time in library.
Will monopolistic competitors realize economic profits in the long run? Why or why not?
Why can banks continue to hold reserves that are only a fraction of the demand deposits of their customers? Is your money safe in a bank? Why or why not?
Why wouldn't you reduce your money holdings and open an interest-earning savings account? What is the opportunity cost of holding cash?
In the above question, if the Fed wanted to respond to drop in money supply with open market operations. How many dollars' worth of bonds should be involved?
If banks lend 75 percent of their total deposits, explain how the deposit expansion multiplier would be determined. What is its numerical value?
What is the full-employment budget? Why is it a better indicator (than the actual budget) of the expansionary or restrictive impact of fiscal policy?
The unemployment rate at the time was less than 4 percent. How does economic theory suggest that this policy would impact income and prices?
Do you think we should increase or decrease taxes at this time? Should monetary policy be more or less expansionary?
Why would a government deficit be more expansionary if it were financed by borrowing from the Federal Reserve rather than the general public?
Explain the Keynesian view of how monetary policy affects income, employment, and output.
Why do the results support the Keynesian viewpoint? Should any lags be considered in interpreting the impact of fiscal policy on GNP?
How bad was the Great Depression? What rates of unemployment, deflation, and interest actually existed during the early thirties?
Do you think there will ever be another Great Depression? Why or why not? Does debt financing increase the supply of money? Explain.
Why might the general level of prices begin to rise? Explain why expansionary macro policy is likely initially to impact output rather than the price level.
Would a government deficit be more expansionary if it were financed by borrowing from the Federal Reserve rather than the general public? Explain.
According to the monetarist, what should have happened to interest rates, prices, and unemployment, following these developments?
Explain why you either agree or disagree. Present empirical evidence to support your view.
Discuss the consistency of these data with the hypothesis that political entrepreneurs are vote maximizers.
Why political factors be a major obstacle to economic stability? Suggest a plan that you think would reduce likelihood that public policy would destabilizing.