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Which of the hypotheses of Theorem fail in this example? Show that there does not exist a Walrasian equilibrium in this exchange economy.
Explain the Keynesian contention that a change in money supply is likely to be accompanied by a change in velocity of money in opposite directions.
Use economic concepts to frame decision making. Market structure will determine what decisions are available to a firm, such as ability to influence price.
Explain why the size of the population can create a problem for a developing country. Describe how the World Bank assists developing countries.
List two reasons why there is concern for the plight of developing countries. Describe the stages of economic development.
What questions would you ask local officials to determine whether they are successfully moving toward a market economy?
How do economies in transition handle privatization? What are the contrasting approaches to economic growth in Taiwan and China?
Explain the significance of capitalism, privatization, vouchers, Five-Year Plan, Gosplan, collectivization, perestroika, Great Leap Forward and Solidarity.
Synthesizing Information Why would developing nations be interested in obtaining funding from private sources rather than a government?
What can a country do to encourage economic development? What are the costs and benefits of regional economic cooperation?
What are two external sources of funds for economic development? What problem is associated with aid grants from foreign nations to developing countries?
Predicting Suppose a nation has a great deal of human capital but few natural resources. In what kinds of products might the nation specialize?
How do comparative advantage and absolute advantage differ? Use examples to support your comparison.
Why does total world output increase as countries specialize to engage in trade? What does the theory of comparative advantage suggest that countries should do?
Explain significance of exports, import, absolute advantage and comparative advantage. Describing How do specialization and trade benefit both trading partners?
Writing Some economists favor policies that stimulate demand. Write a two-page paper outlining the policies and the reason for your choice.
Do you think this independence is beneficial and should be maintained, or would you prefer that elected officials have more control over monetary policy?
How do the events of the 1980s and the early 2000 support or disprove the central supply-side position about the relationship between taxes and economic growth.
The BIG Idea Why and how could monetary policy be destabilizing? Contrasting How do aggregate supply and demand differ from simple supply and demand?
State an example of how politics sometimes overrides economic policies. Describe how economists sometimes differ in their views about the economy.
Discuss the difficulty of using discretionary fiscal policy. Explain why new problems will arise in the economy, even as old ones are solved.
Describe how monetarists determine the proper growth rate for the money supply. Explain how supply-siders would reduce the government's role in the economy.
Identify which component of GDP Keynes labeled as the cause of instability. Discuss the effects of the multiplier and the accelerator.
Fiscal and Monetary Policy Suppose that Congress passes a massive tax cut during an election. What actions might the Fed take in response? Explain your answer.
Analyzing Visuals Look at the cartoon on the previous page. Why do you think economists care so strongly about their views?