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For example, in 2019, the money supply was $360, the price of a pie was $9.00, and the economy produced 800 pies. Few foreign citizens currently work in the U.S. and few foreign firms maintain facilities in the U.S. Yes. In the best case scenario, the Fed will: a Increase money supply to take the economy to point X. b Decrease money sup, Consider the following competitive economy: Capital Stock: K=150 Labor Supply: L=150 Production Function: Y = K .4 L .6 Consumption Function: C = 10 + 0.7 Y d Investment Function: I = 40 - 100r Government spending: G=30 Taxes: T=30 For this produ, The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. The Nominal GDP for the year 2015 is $7450. If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use: A. more capital and less labor. Will you buy a flat screen or 3D television? Our experts can answer your tough homework and study questions. Numerically. Derive the base-year-quantity price index. b. Question Velocity and the quantity equation Consider a simple economy Consider a simple economy that produces only cell phones. The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). B) $4 per unit, and average fixed cost (AFC) is, A firm has the production function q = 0.2LK + 5L^2K - 0.1L^3K. People save 20% of their income, so their savings rate s = 0.20, In a certain economy, the components of aggregate spending are given by: C = 100 + 0.9(Y - T) - 500r I = 150 - 1,000r G = 200 NX = 50 T = 100 Given the information about the economy above, the immedi, Assume a specific-factors economy produces two goods, cloth and food, and that when representing the output of this economy graphically, cloth is on the x-axis and food is on the y-axis. Fixed cost is FC = 500 (sunk cost). Assume it is currently in its initial steady state. Suppose we have a small economy that produces only two goods Velocity and the quantity equation Consider a simple economy that produces only pens. B. how firms respond to changes in interest rates. The labor costs $6 and pizza sells for $10. Gross Domestic Product (GDP) in which of the following ways? In the short run, when a firm is producing quantities that are greater than the quantity which minimizes short-run average costs, the marginal product of labor (MPL) A. will be rising the more the firm is producing. Complete the second row of the table by filling in the expected and actual real interest rates on car loans immediately after the increase in the money supply (MS).