University of Bahrain College of Business Administration Department of Economics and Finance Econ 341 - Monetary Economics Problem Set 6 (Chapter 22) AlShawa 1. According to the quantity theory of money‚ movements in the price level result * a. solely from changes in the quantity of money. b. primarily from changes in the quantity of money. c. partially from changes in the quantity of money. d. from changes in factors other than the quantity of money. 2. Because Keynes assumed
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Ch. 26 1) List and explain the characteristics of the market structure known as monopolistic competition. 2) List some examples of monopolistically competitive firms. 3) Explain‚ graphically and verbally‚ how a firm in monopolistic competition derives its demand curve and marginal revenue (MR) curve. 4) Explain‚ graphically and verbally‚ how a firm in monopolistic competition determines what quantity to produce and what price to charge in order to maximize its profits. 5) Explain the impact
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1. Use only 1 or 2 sentences only to answer in terms of economic concepts. [10 points] a. What are automatic stabilizers? Automatic stabilizers are part of the fiscal policy and are built into the federal/state/local tax and transfer systems. They are put in place to stimulate aggregate demand in a recession without the need for action by policymakers. Corporate and personal income taxes are the best-known automatic stabilizers. For example: when the economy is in its growth stage‚ our progressive
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Econ 471 Prof. Bee-Yan Roberts COVER PAGE TO PROBLEM SET #1 Printed Name: While you are permitted to work together as a group‚ you must write out the answers on your own (preferably in a separate room) without any help from those in the group. Problem sets with similar answers in any question will receive a grade of zero. I have not received any help and I have not provided help to other students in writing up the answers to this problem set. Signature:
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the decision making mechanism‚ social customs and political realities of society. The three central coordination problems any economy must solve are: 1. What and How much to produce 2. How to produce it 3. For whom to produce it Economist find that individuals want more than is available‚ given how much their willing to work. That means that in our economy there is a problem of scarcity. Scarcity: The goods available are too few to satisfy individual’s desires. Scarcity has two elements;
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Payments National Income Accounts Gross National Product is the value of all final goods and services produced by its factors of production and sold on the mkt in a given time period. It can be divided into: 1. consumption 2. investment 3. govn’t purchase 4. current account balance Capital Depreciation and National Transfers GNP has to be equal to national income. In order for this to hold we need to make some adjustments. 1. GNP doesn’t take into account the economic loss
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Quota. The decrease in Welfare defined as the total surplus depends on the tax and quota being compared. Both a Quota and a Tax lead to higher prices and less of the good being produced and purchased. The Dead Weight Loss for each could be the same. 3. (5 pts) A technology shift that reduces costs will cause total surplus to fall if there is a sufficiently large reduction in producer surplus True – Total Surplus equals Consumer Surplus plus Producer surplus. If a technology shift causes producer
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businesses can make the most profits. B) how businesses can decide on the best use of scarce resources. C) how businesses can operate at the lowest costs. D) how businesses can sell the most products. Answer: B Level of Difficulty: Easy 3) Managerial economics is best defined as A) the study of economics by managers. B) the study of the aggregate economic activity. C) the study of how managers make decisions about the use of scarce resources. D) All of the above are
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elastic. 3. D curve is horizontal at the P determined by the intersection of market S&D curves Profit Maximzing decision 1. Since MR=MC 2. Set P (price) = MC 3. MR curve = Demand curve 4. Firms can sell all they want at this market price Q* is the profit maximizing level of output. 1.For output < Q*‚ P < MC. Increase output -->increase revenue more than cost-> More π. 2. For output > Q*‚ P < MC. Reduce output Reduce costs increase revenues-> More π 3. Profits
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economics central to an understanding of the problems of development? It is because that the development of a country depends on economic factors. Economics helps you to interpret how a country is developing‚ economic policies of a country that determine whether or not it develops and how fast it develops if it performs. In addition‚ economics helps you to understand how wealth and finance are distributed‚ and the causes and effects of borrowing and lending. Problems of development are like not having enough
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