Economics Answers

49. If inflation accelerates due to the increase in the price of oil (an import), the best policy to combat
such inflation in a country with a high unemployment rate, would be to...

[1] apply the supply-side policy that will increase aggregate supply, which will be illustrated by
a rightward shift of the AS curve.
[2] respond with demand management policy that will increase aggregate demand, which will
be illustrated by a rightward shift of the AD curve.
[3] implement contractionary monetary policy, illustrated by the rightward shift of the AD
curve.
[4] apply incomes policy, illustrated by a leftward shift of the AS curve.

Assume a closed economy and no government. Also assume consumption
C=50-0.8Yd and investment I=80
derive the equation for saving

The Perch is a pub that has two types of potential customers: legal and underage drinkers.
It is illegal to allow entry to underage drinkers, but there is no way to perfectly identify
underage drinkers (fake IDs, etc.). Assume that Perch ’s marginal cost is $3.00 per drink.
The drink demand for a representative customer in each of the two groups is given by:
PL= 6- QL (legal drinkers)
PU= 4 -QU (underage drinkers)
(1) If the price per drink is $3, how many drinks does each type of drinkers have?
(2) What is a pricing policy that will extract all of the profit from the legal drinkers?
(3) How many drinks do legal drinkers have under this pricing policy?
(4) Do underage drinkers have incentives to go to the bar under this pricing policy? Why?

jon snow requires a loan of $15000. he enquires with three banks, bank A, bank B and bank C. bank A offers J24=6.8%; bank B offers J2=7% and bank C offers J1=6.95%. Which bank should jon get his loan from

a loan of $500 is to be paid with two payments of $300, one in 3 months, and another in 6 months. the compound interest charged per annum on the loan is;

a coupon bond is purchased for $900 with the maturity period of 6 years. the coupon payment of $50 is to be paid at the end of each half year. if the desired rate of return (yield rate) is J2=12% p.a. , then the face value of the bond is;

what annual deposits are needed for 10 years to provide for a perpetuity of $3000 per year with the first payment due at the end of 11, 1 year after the final deposit with J1 = 8% per annum

Two firms compete in a market to sell a homogeneous product with inverse demand function: P = 400 – 2Q. Each firm produces at a constant marginal cost of $50 and has no fixed costs -- both firms have a cost function C(Q) = 50Q.

If this market is defined as a Cournot Oligopoly, what is the optimal amount for firm 1 to produce? (Round to the nearest whole number)

Refer to the information above.

If this market is defined as a Cournot Oligopoly, what is the optimal amount for firm 2 to produce? (Round to the nearest whole number)

If this market is defined as a Cournot Oligopoly, what is the market price? (Round to the nearest whole number)

Using your answers above, what are firm 1's profits? (Round to the nearest whole number)

Using your answers above, what are firm 2's profits? (Round to the nearest whole number)

Explain the distinction between change in quantity of a good demanded and change in demand. Be sure to state the factors that lead to these changes.

Hi! I am writing a broad overview of the different economic theories focusing on Classical, Keynesian, and Monetarism. My understanding is the modern accepted view of inflation is an increase in the money supply that is not met by a proportionate increase in RGDP, prompting increase in pricing. However, I'm uncertain if all three theories accept this. I'm familiar with their stances on fiscal and monetary policy, but do all three theories accept this formula for explaining inflation?