Start Discovering Solved Questions and Your Course Assignments
TextBooks Included
Active Tutors
Asked Questions
Answered Questions
Explain in detail the effects of such an event on the economy of Paranoia assuming no response on the part of the central bank or the Treasury.
Two separate capacity constraints are discussed in this chapter. Which is greater, fullcapacity GDP or potential GDP? Why?
Your investments had increased in value by the same percentage as the S&P 500 index had increased, how much would you have today?
How might social, or implicit, contracts result in sticky wages? Use a labor market graph to show the effect of social contracts on wages and on unemployment.
Has unemployment increased or decreased? What has happened to wages? Does the pattern of unemployment help explain the movement of wages?
How will the welfare system affect labor force participation rates, labor supply, and unemployment?
What trends do you observe? Can you explain what you see using aggregate supply and aggregate demand curves?
Explain which type of unemployment you think is most directly affected by the size and duration of unemployment benefits.
All inflation is anticipated. If the Commerce Bank of Beverly Hills charges an interest rate of 35 percent in year 2, what is the bank's real interest rate?
What is the marginal propensity to consume in Freedonia, and what is the marginal propensity to save?
Explain briefly how the problem of global warming and the problem of adequate household saving are similar.
What is the balanced-budget multiplier? Explain why the balanced-budget multiplier is equal to 1.
Draw a graph showing the data for consumption spending, planned aggregate expenditures, and aggregate output.
You are appointed secretary of the treasury of a recently independent country called Rugaria. What will the size of the budget be after 10 years?
At what level of aggregate output does the consumption curve cross the 45° line? Explain your answer and show this on the graph.
According to the Bureau of Economic Analysis during the recession of 2007-2009. How would this change affect equilibrium output when planned investment changes?
How much did Celestial actually invest this year? How much did it plan to invest? Would Celestial produce more or fewer units next year? Why?
What arguments are likely to be used in support of such a tax cut? What arguments might be used to oppose such a tax cut?
What is likely to happen? What would happen if the government were running a deficit and saving were equal to investment?
MPC = .9. What is the government spending multiplier? If the government spending multiplier is 6, what is the tax multiplier?
Show this transaction in a T-account for the Bank of Bonzo. What is the maximum amount of loans that can be created from Fred's initial deposit?
How will these transactions affect M1 and M2? How will these transactions change M1 and M2 in the short run? What about the long run?
Why would anyone in Zimbabwe be willing to accept U.S. dollars in exchange for goods and services?
You will then have 10 percent more money than you started with. What do you think of the plan? Will it work?
What is the effect of the Treasury sale on the money supply in Ragu? What is the effect of the central bank purchase of bonds on the money supply?