exports rise‚ imports are unchanged‚ and net exports increase. c. When your uncle buys a new Volvo‚ an American is buying a foreign good‚ so U.S. exports are unchanged‚ imports rise‚ and net exports decline. d. When the student bookstore at Oxford University sells a pair of Levi’s 501 jeans‚ foreigners are buying U.S. goods‚ so U.S. exports increase‚ imports are unchanged‚ and net exports increase. e. When a Canadian citizen shops in northern Vermont to avoid Canadian sales taxes‚ a foreigner is buying
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Classical and Keynesian Economic Theories Economics can be defined as a social science concerned primarily with description and analysis of the production‚ distribution‚ and consumption of goods and services. There are two main schools of thought when it comes to economics: Classical and Keynesian economics. Each theory takes a different approach to the economic study‚ but neither approach is flawless. First‚ looking at the Classical economics theory‚ it is based largely on the thought that free
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St Atanagio is a remote island in the Atlantic. The inhabitants grow corn and breed poultry. The accompanying table shows the maximum annual output combinations of corn and poultry that can be produced. Obviously‚ given their limited resources and available technology‚ as they use more of their resources for corn production‚ there are fewer resources available for breeding poultry. Maximum annual output options Quantity of Corn (pounds) Quantity of Poultry (pounds) 1 1200 0 2 1000 300
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Question 2: (a) Suppose the income elasticity of demand for pre-recorded music compact disks is +5.0 and the income elasticity of demand for a cabinet maker’s work is +0.5. Compare the impact on pre-recorded music compact disks and the cabinet maker’s work of a recession that reduces consumer incomes by 10 per cent. (2 marks) (b) How might you determine whether the pre-recorded music compact discs and MP3 music players are in competition with each other? (2 marks) (c) Interpret the following
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PROBLEM SET 1 Name: ______________________________________________ Problem Set 1 is to be completed by 11:59 p.m. (ET) on Monday of Module/Week 2. 1. Based on the information provided for the market for video games‚ answer the following questions. PRICE Q DEMANDED Q SUPPLIED $50 5 9 $45 7 7 $40 9 5 $35 11 3 $30 13 1 a.) Draw and properly label the demand and supply graphs (this means you must label the axes and any lines you include on the graph). b.) What is the equilibrium
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Chapter I 2. To mitigate agency problems between senior executives and shareholders‚ the compensation committee of the board should devote more to long term incentives; the idea is to align the pocketbook interests of managers directly with those of stockholders‚ and the reason is to motive a manager and make him or her to act in the interests of the firm’s stockholders depends on the structure of his or her compensation package‚ the threat of dismissal‚ and the threat of takeover by a new group
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The Power of Markets: Who feeds Paris? Two basic assumptions that economists make about individual and firms are that all individuals act in a way to make themselves as well- off as possible. For example‚ individuals make the best use of their utility and skill‚ so they can earn more money. The second assumption is that firms always try to maximize the money they earn. For example‚ if an entrepreneur had two business choices that he could make‚ he would pick the business choice that he thinks
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NZ farmers hit by worst drought in 30 years Introduction Major dairy exporter New Zealand has joined a growing list of agricultural countries being sucked dry by a drought - its worst in 30 years - with the government warning of higher global milk prices. Market for milk when drought occurs in New Zealand 1. There are higher global milk prices. Due to drought in New Zealand crops that are produce for cow is sucked dry. Higher prices of crops will result in higher cost of maintaining
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1. From the definition of GDP we arrive at the following expression: c + i + g + x-m = y = c + s + t Discuss the three important economic relationships that can be derived from this expression related to the definition of GDP and explain each carefully. The expression above depicts two different ways to come up with real GDP for a country. The left side of the expression explains expenditure side of computing real GDP which can be rewritten as: y = c + i + g +x – m In real terms‚ it could
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