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c. Many people believe trade deficits are a serious problem and need to be eliminated.
(i) Explain the three actions the Fed could take to reduce the trade deficit in the U.S., and explain carefully how these actions would result in a reduced trade deficit.
(ii) What effect would these three actions from part I of the question have on GDP? Describe the effects on each of the components of aggregate demand. Include an AD/AS graphical analysis of your answer.
2. The U.S. economy experienced large trade deficits in the 1980s and 1990s and tremendous economic growth in the mid- and late-1990s.
a. Trade deficits have an effect on inflation. Explain the relationship between trade deficits and investment verbally and mathematically using the concept of the balance of payments.
b. Explain verbally the relationship between investment and long-term economic growth and describe the relationship graphically in an AD/AS graph.
b. Explain the relationship between interest rates and unemployment. How do changes in the interest rate affect the level of unemployment in the economy?
Answer:
c. Consider the relationship between interest rates and inflation.
(i) Explain the difference between real and nominal interest rates.
Answer:
(ii) If the Fed takes actions that will change interest rates, how is this likely to affect inflation?
Answer:
Answer:
c. Consider the relationship between interest rates and inflation.
(i) Explain the difference between real and nominal interest rates.
Answer:
(ii) If the Fed takes actions that will change interest rates, how is this likely to affect inflation?
Answer:
a. The AD/AS model describes changes in the economy by relating real GDP (output) and the price level.
(i) Compare and contrast the Keynesian portion of the AD/AS model with the classical portion of the AD/AS model, and explain how the level of production is determined in each situation. Use graphs to explain your answer.
Answer:
(ii) Compare and contrast changes in aggregate demand and changes in aggregate supply in the AD/AS model. Use graphs to explain your answer.
(i) Compare and contrast the Keynesian portion of the AD/AS model with the classical portion of the AD/AS model, and explain how the level of production is determined in each situation. Use graphs to explain your answer.
Answer:
(ii) Compare and contrast changes in aggregate demand and changes in aggregate supply in the AD/AS model. Use graphs to explain your answer.
Icy Candy announces a 1 for 8 bonus issues. Icing Candy shares are trading at $9.00 before the bonus issue.
a. Calculate the theoretical price of Icing Candy’s shares immediately after the bonus issue.
b. Casper has 1,000 shares in Icy Candy before Icing Candy announced the 1 for 8 bonus issue.
i. How many bonus shares will Casper entitle to?
ii. Find the value of Casper’s stockholding in Icy Candy before and after the bonus issue.
a. Calculate the theoretical price of Icing Candy’s shares immediately after the bonus issue.
b. Casper has 1,000 shares in Icy Candy before Icing Candy announced the 1 for 8 bonus issue.
i. How many bonus shares will Casper entitle to?
ii. Find the value of Casper’s stockholding in Icy Candy before and after the bonus issue.
1. Why do underwater welders make more money than people who feed gorillas at a zoo? Use two graphs to assist your answer.
2. What is the marginal revenue product of labor? How could an economist use this concept to evaluate the worth of a hairdresser? Could it be used to evaluate the worth of a preacher at a church? Why, or why not?
3. When Bob Griese played football for the Miami Dolphins, he was underpaid every year of his career.Why?
4. Where do nonpecuniary wages enter into the earnings of lifeguards, nature photographers, and military snipers?
2. What is the marginal revenue product of labor? How could an economist use this concept to evaluate the worth of a hairdresser? Could it be used to evaluate the worth of a preacher at a church? Why, or why not?
3. When Bob Griese played football for the Miami Dolphins, he was underpaid every year of his career.Why?
4. Where do nonpecuniary wages enter into the earnings of lifeguards, nature photographers, and military snipers?
All firms under collusive oligopoly model maximise profit but under leadership model only the leader maximizes profit .Discuss the statement with appropriate diagrams
Economics
Protesters insist that the economic benefits of trade have social costs that go unrecognized.
Whether or not you agree with them, make a list of those social costs.
Open your closet and look at the labels on your clothing and look for the labels on your consumer electronics to see where they were made.
Are you, individually, better off with cheap clothing and electronics? In that context do we owe something to those who bear those social costs
Remember, you must answer the original question and comment on the response of at least two other students to receive full credit for participation.
Whether or not you agree with them, make a list of those social costs.
Open your closet and look at the labels on your clothing and look for the labels on your consumer electronics to see where they were made.
Are you, individually, better off with cheap clothing and electronics? In that context do we owe something to those who bear those social costs
Remember, you must answer the original question and comment on the response of at least two other students to receive full credit for participation.
As a stockholder in Randolph Corporation, you receive its annual report.
In the financial statements, Randolph has reported that the after-tax (net)
income is $300 million. With 150 million shares of common stock
outstanding, Randolph announced to distribute $100 million of dividends
to its shareholders. The stock is now sold for $20 per share.
i. Calculate the value of investor’s wealth who holds 4,000 shares of Randolph
Corporation before the ex-dividend date,
ii. Calculate the dividend income of an investor who holds 4,000 shares of
Randolph Corporation until the ex-dividend date,
iii. Calculate the value of shareholding on the ex-dividend date of an investor who
holds 4,000 shares of Randolph Corporation.
In the financial statements, Randolph has reported that the after-tax (net)
income is $300 million. With 150 million shares of common stock
outstanding, Randolph announced to distribute $100 million of dividends
to its shareholders. The stock is now sold for $20 per share.
i. Calculate the value of investor’s wealth who holds 4,000 shares of Randolph
Corporation before the ex-dividend date,
ii. Calculate the dividend income of an investor who holds 4,000 shares of
Randolph Corporation until the ex-dividend date,
iii. Calculate the value of shareholding on the ex-dividend date of an investor who
holds 4,000 shares of Randolph Corporation.
A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your result
b) How much will it charge?
c) Can you determine its profit per day? (Hint: you can; state how much it is.)
d) Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price?
e) How would the $1,000 per day tax its output per day?
f) How would the $1,000 per day tax affect its profit per day?
g) Now suppose a tax of $100 per unit is imposed. How will this affect the firm’s price?
h) How would a $100 per unit tax affect the firm’s profit maximizing output per day?
b) How much will it charge?
c) Can you determine its profit per day? (Hint: you can; state how much it is.)
d) Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price?
e) How would the $1,000 per day tax its output per day?
f) How would the $1,000 per day tax affect its profit per day?
g) Now suppose a tax of $100 per unit is imposed. How will this affect the firm’s price?
h) How would a $100 per unit tax affect the firm’s profit maximizing output per day?
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#339914 on Dec 2023
#339914 on Dec 2023