SRAS Y=YFE +2(P - Pe) Okun’s Law (Y-YFE)/YFE=-2(u-unr) Full-employment output YFE=1000 Natural unemployment rate unr=0.06 a) Suppose that the money supply M=1000 and that the expected price level Pe=50. What are the short run equilibrium values of output Y‚ the price level P‚ and the unemployment rate u? What are the long run equilibrium values of these three variables?
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corn are endogenous variables while government ethanol mandates‚ the local weather during the growing season‚ and the extent of wild fires affecting Russian wheat production and therefore world-wide wheat prices‚ are exogenous variables. A1-4. Suppose Ontario
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questions‚ on the exam. I did not include any here‚ as each true/false will require a different reasoning than others. Question 1: Consider a project with the following risk-free cash flows: t = 0 t = 1 t = 2 -40 20 25 Suppose that one year zero-coupon bonds yield 6% and two year zero-coupon bonds yield 8%. 1a) Find the NPV of the project. 20/(1+6%)+25/(1+8%)^2-40=0.3014 1b) Describe the tracking portfolio for this project. FV=25 and 20 1c) Describe
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the concentration measures I4 and IHH for this industry (ii) Suppose now firm 2 and firm 3 merge and become a single firm labeled firm 23. ˆ ˆ Compute the postmerger concentration measures values I4 and IHH . def ˆ (iii) Compute the change in concentration resulting from this merger‚ ∆I4 = I4 − I4 and def ˆ ∆IHH = IHH − IHH . (iv) Suppose now the merger between firm 2 and firm 3 did not work out‚ so the two firms remain separated. However‚ suppose firms 6‚ 7‚ and 8 now merge. Compute ¯ ¯ the postmerger concentration
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change? What can you tell me about price in this market prior to the change? What can you infer about the price elasticity of demand before the price change? A firm’s production function is given by Q = 4K0.5L0.5‚ where K is capital and L is labor. Suppose that w = 2 and r = 2. How much K and L would the firm optimally employ to produce 64 units of output? What is the total cost of producing this level of output? Demand is given by QD = 20 – P. Supply is given by QS = 10. What price ceiling does the
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Suppose the market demand for cell phone is . How many firms will there be in the long run equilibrium? A) 50 B) 82 C) 164 D) 212 23) Competitive equilibrium maximize total welfare because A) Firms make positive economic profits in the short run. B)
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Chapter 1 Questions: 3‚ 4‚ 12‚ 14‚ 15a‚ 15b‚ 16‚ 17‚ 21‚ 23‚ 24‚ 25 3. Who are the major types of issuers of bonds in the United States? The major types of issuers of bonds in the United States are the United States Government and its agencies‚ municipal governments and corporations or Special Purpose Vehicles (SPV). 4. What is the cash flow of a 10-year bond that pays coupon interest semiannually‚ has a coupon rate of 7%‚ and has a par value of $ 100‚000? The periodic cash flow is $3‚500 as
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2005 Homework 7 November 22‚ 2005 Due at the start of class on Thursday‚ December 1st. 1. Suppose there are two tellers taking customers in a bank. Service times at a teller are independent‚ exponentially distributed random variables‚ but the first teller has a mean service time of 4 minutes while the second teller has a mean of 7 minutes. There is a single queue for customers awaiting service. Suppose at noon‚ 3 customers enter the system. Customer A goes to the first teller‚ B to the second
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65 Questions 65. Referring to Exhibit 29-4‚ suppose you are given the following information about the production of two goods in two countries. (A) | Who has an absolute advantage in the production of each good? A | (B) | Find the opportunity cost of producing bananas in each country.A: banan 6/12 = 0‚5 radio 2B: banan 2/8 = 0‚25 radio 4 | (C) | Who has a comparative advantage in banana production?Country B. | 66. Suppose the post-trade relative price is 1/3 radio per banana
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1. Suppose the Federal Reserve instructs the Trading Desk to purchase $1 billion of securities. Show result of this transaction on the balance sheets of the Federal Reserve System and commercial banks. > Change in Federal Reserve’s Balance Sheet Assets Liabilities Securities + $1 billion
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