Because of a recession, the inflation rate expected for the coming year is only 3%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 3%. Assume that the real risk-free rate…
what is aggeregate demand according to closed economy? Aggregate demand curve shows the relationship between the total quantities of output and price level demanded and price level in an economy. In a closed economy, it is basically a sum of…
explain the criticisms of haberler's theory of opportunity cost of international trade?? Let us define the concept of opportunity cost first. In the context of production, the opportunity cost of producing a commodity (say X), is the quantity of another…
How are domestic prices determined in the absence of trade between two countries? In autarky, i.e. under no trade situation, the domestic prices are determined by equating the price ratio with the slope of the PPF, i.e. MRTS. Suppose an…
About four years ago, Kanye West performed at the UIC Pavilion. General admission tickets were priced at $30. Concert promoters say that price elasticity of demand for general admission concert tickets was-1.5. Although this show was sold out, concert promoters…
Question: Discuss the trade-offs between efficient taxes, those with very low dead weight loss and `fair' taxes, using whatever definition of fair you wish to use.I am completely lost on what this means, and I have been struggling to answer…
Phoenix furniture uses 10 workers, each working 8 hours, to produce 80 rocking chairs. What is Phoenix's productivity Total units of production = 80Working hours of each employee = 8 hrs, number of employees = 10. Therefore total working hours…
What is the meaning of a deficit (surplus) in (a) merchandise trade balance (b) balance on services (c) balnace in goods and services (d) balance on investment income, (e) balance on goods servecis and income, (f) balance on current accound…
Question 1(2 points) Refer to the above figure. Profits for this firm are negative Question 1 options: A) only for all points less than B. B) only at points B and C. C) for points between B and C. D)…