Assume that the economy's real GDP is growing. a. What will happen to money demand over time? b. If the Fed leaves the money supply unchanged, what will happen to the interest rate over time? c. If the Fed changes the money supply to match the change in money demand, what will happen to the interest rate over time? d
The required reserve ratio is 5% Assets: Liabilities: Cash- $24 mil Demand Deposits- $180 mil Deposits w/ Fed.- $16 mil Time deposits- $10 mil Loan- $100 mil Capital- $10 mil Treas. Securities- $60 mil So I got the following: Level of reserves is $40 mil.
1. If the public's demand for US currency increased by $100 Million what action in the "open market" would the Fed have to take to prevent bank reserves from falling? 2. Which of the following A or B would have a larger impact on AD? Explain your answer. A) A program of tax rebates distributed uniformly across the pop
My questions are same problems on the Managerial Economics -theory,applications and cases by Edwin Mansfield (5th edtion)
2. The world price of wine is below the price that would prevail in the United States in the absence of trade. a. Assuming that American imports of wine are a small part of total world wine production, draw a graph for the U.S. market for wine under free trade. Identify consumer surplus, producer surplus, and total surplus
1-Discuss the limitations of the U.S. "supply side" policy in the war on drugs. Can we win the war on drugs? explain your position on legalization. Why does prohibitionism policy by gov. lead to a) an increase in poverty crime, b) an increase in violent crime, particularly crimes with handguns?Discuss in terms of the pros and co
Examine the effects of a change in the money supply in an open economy under a flexible exchange rate system. How are your conclusion affected by the adoption of a fixed exchange rate?
Suppose all firms in a perfectly competitive market structure are in long-run equilibrium. The demand for the firms' product increases. Initially, price and economic profits rise. Soon afterward, the government decides to tax most (but not all) of the economic profits, arguing that the firms in the industry did not earn them
Mali Apples 40 32 24 16 8 0 Bananas 0 4 8 12 16 20 US Production Possibilites apples 75 60 45 30 15 0 Bananas 0 5 10 15 20 25 Based on above info 1. graph each country's production possibilites curve. 2. On the graph for Mali, a. show a production point not attainable at this time b. show a point of ineffic
Economic questions are attached.
The model with nominal rigidities is: yd = m - p + v, ys = b(p - E[p]) +b(u - a E[u]), w = E[p] + a E[u], a = aà ?/d+à ?. And The model without nominal rigidities is: yd = m - p + v, ys = b(1-a)u, w = p + au, a = aà ?/d+à ?. Find P* and Y* for model with nominal rigidities?
A. In 1996, several cows in Great Britain came down with "mad cow disease". As a result, the countries of the European union banned the import of British beef. The result was higher beef prices in Continental Europe. b.In 2001, a survey of plant stores indicated that the demand for houseplants was rising sharply. At the same
Use demand and supply analysis with this statement: The economy is doing well in 2000. Income was rising and the stock market hit new record highs. As a result, the price of housing rose.
A)Show how an increase in personal and federal income taxes ultimately affects the Bank of Canada's balance sheet. b)How are the Bank of Canada's transactions in the foreign exchange market from part (a) reflected in the balance of payments account? c)Would the impact of the tax cut be larger or smaller under a floating ex
For the following questions, answer True (T), False (F) or Uncertain (U). Please briefly explain your answer. 1. Exchange rate overshooting explains why permanent government spending increases are less effective in increasing output than temporary increases. 2. Bretton Woods failed because the U.S. abused its position a
12) You are the manager of a small pharmaceutical company that received a patent on a new drug three years ago. Despite strong sales ($125million last year) and a low marginal cost of producing the product ($0.25 per pill), your company has yet to show a profit from selling the drug. This is, in part due to the fact that the c
Describe the three main factors that determine aggregate money demand. Illustrate, with examples, how changes in these factors alter aggregate money demand.
The demand curve for French plutonium shifts outward, at about the same time as the appearance of the foreign-exchange dollars. What happens to the demand for French Francs? a. Transaction demand goes up b. Precautionary demand goes up c. Speculative demand goes up d. Nothing
After a country's (not USA) foreign-capital flows are frozen, a large international supply of USD dollars shows up. What happens to the quantity of USD dollars demanded? a. Quantity demanded of dollars goes up, at lower interest rates. b. Quantity demanded of dollars goes up, at higher interest rates. c. Quantity demand
1. Consider a firm operating in a perfectly competitive market. a. How much output will this firm produce ? b. How much profit (or loss) is this firm making in the short run ? c. What is the value of average fixed cost at this profit-maximizing output? d. At what output will average variable cost be minimized? e.
If I had initial endowments XA = (0, X2), and XB = (X1, 0) Is there any impact if both goods were inferior, X2 for A and X1 for B? If I started with one equilibrium p* and went to another p* that had a higher price for X1, could the second p* be an equilibrium (using a Slutsky decomposition and keeping in mind the inferiorit
Suppose that the market demand for bus rides is given by Q=420-30P and the market supply of bus rides is given by Q=30P, where Q is bus rides per week in thousands and P is the price per bus ride in dollars. a. Find the equilibrium price/quantity combination for bus rides. b. How much is spent on bus rides? What is consumer
Suppose that the market demand for bus rides is given by Q=420-30P and the market supply of bus rides is given by Q=30P where Q is bus rides per week in thousands and P is the price per bus ride in dollars. a. Find the equilibrium price/quantity combination for bus rides. b. How much is spent on bus rides? What is consume
Suppose that the market demand for broccoli is given by Q=1000-5P and the market supply of broccoli is given by Q=4P-80 where Q is quantity per year measured in hundreds of bushels an P is price in dollars per hundred bushels. a. Find the equilibrium price/quantity combination b. How much in total is spent on broccoli? c.