Describe the effects of contractionary monetary policy by the domestic central bank on output, the real interest rate, and net exports in both the domestic and foreign country, using a Keynesian model in the short run
What happens in the long run? Show a diagram to illustrate the short- and long-run effects in both countries.
Domestic country: output falls, real interest rate rises, and net exports rise
Foreign country: output falls, real interest rate falls, and net exports fall.
There are no real effects in the long run.
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Suppose it costs a farmer $1.00 to produce 1 unit of corn, $2.10 to produce 2 units of corn, and $3.30 to produce 3 units of corn. What's the average cost of producing 3 units of corn?
A) $1.00 B) $1.10 C) $2.10 D) $3.30
In swap transactions, the trader is interested in
A) the difference between spot and forward rates. B) only the spot rate. C) only the forward rate. D) both the spot and deposit interest rate.
A monopolist's demand curve is given by:
p = 100 + A1/2 – Q where Q is the quantity of output and A is the quantity of advertising. Suppose the cost of advertising and output is given by: C(Q,A) = 10Q + A Determine the profit maximizing quantity of output and advertising.
Which of the following will result in the greatest deadweight loss from tax?
a. A tax on gasoline b. A tax on Porsche cars c. A tax on salt d. A tax on cigarettes