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How would an increase in investment spending affect the economy (aggregate supply, aggregate demand, RGNP, and inflation) in the short run?
Use inventory analysis to explain how the economy would adjust to an increase in aggregate supply and to a decrease in aggregate supply.
What are the arguments in favor of wage and price controls? Is the argument for wage and price controls stronger when inflation is caused by cost push forces?
How much should taxes be cut to accomplish this goal? Explain. How big an increase in investment spending (induced by a tax expenditure) would be needed?
Explain how each of these policies affect aggregate demand and aggregate supply by themselves. What is the combined effect?
Where do you stand on the tax-cut debate? Would a big tax cut improve economic conditions? Which of the four taxes discussed in this chapter should be cut?
You have persuaded the chief that money is okay. Now write an essay that would convince him that the money he puts in a bank is safe.
How does this policy affect the money supply? Explain. How does this policy affect the amount of bank loans outstanding? Explain.
What is the relationship between stock and bond prices? Should stock prices go up or down when bond prices fall? Explain your reasoning.
How does credit market combination affect interest rates, investment spending, and the economy in the short run and the long run? Explain.
What is the best way to fight inflation? What is the best way to fight unemployment? What is the best way to fight stagflation? Justify your answer.
Why Should the FRS remain independent? Take a side and defend your choice.
Suppose that new oil deposits are discovered and there is no change in the money supply. How will this increase in RGNP affect the economy?
What is the best way to reduce the unemployment rate? What is the best way to reduce the inflation rate? State your own views and defend them.
A tariff on these inexpensive imports has been proposed to bring their cost up to that of comparable U.S. products. Who would gain from such an action?
What level of a per-unit tax levied on the good sold in this market will maximize the government's tax yield?
What output will maximize total revenue given the non-linear demand schedule p = (60 - 2q)1.5?
If a firm operates with the total cost function TC = 4 + 10(9 + q2)0.5, what is its marginal cost when q is 4?
If a firm faces the total cost function TC = (6 + x)0.5, what is its marginal cost function? Derive MRPLfunction and work out how much L the firm should employ.
The return R on a sum M invested at i per cent for 3 years is given by the formula R = M(1 + i)3. What is the rate of change of R with respect to i?
If firm can employ labour at a wage rate of £4 per hour, how much should it employ to maximize profit?
Make up your own constrained optimization problem for an objective function with three variables and solve it.
What amounts of the inputs x, y and z should a firm use to maximize output if it faces the production function Q = 2x0.4y0.2z0.6 and it has a budget of £600.
What is cheapest way it can produce an output of 500 units? What combination of x, y and z will maximize output given production function Q = 2x0.2y0.3z0.45?
A firm uses 3 different inputs K, L and R to make two final products X and Y. Set up these input requirements in matrix format.