Q: Explain the term free-market economy.
A: There are three types of economies: Free market economy Command economy Mixed economy
Q: 2) If firm I has an elasticity of demand of -2 and firm II has an elasticity of demand of -3. a)…
A: We have two firms with different elasticites and different market powers.
Q: graphically explain the effects of an increase in non-labour income to labour supply.
A: Labor supply is an upward sloping curve because with the increase in wages, the supply of labor…
Q: Modified True or False: State whether each statement is true or false. If the statement is false,…
A: A freely functioning market is the place where people interact with each other without any…
Q: microeconomics help please 24. Consider adverse selection in the car insurance market. Drivers are…
A: Given, Probability of safe drivers, Ps=50%=0.5 Probability of risky drivers, Pr=50%=0.5 Cost of…
Q: Suppose the following data for the Governments 2010 - 2019 state of economy 2019 2010 Population…
A: Population growth is defined as the enhancement in the number of people in the population or…
Q: Please draw the indifference curve of u(x1,x2) = max {x1,x2} in the graph. Also please try to make…
A: We have utility function u(x1,x2) = max {x1,x2}
Q: Suppose the aggregate demand and short-run aggregate supply schedules for an economy whose potential…
A: Recessionary Gap occurs when Real GDP is less than the Potential GDP. Due to recessionary gap,…
Q: Explain how strategic alliances are a substitute for exploiting economie
A: Economies of scope exist when it is gainful for an association to extend its product offering and…
Q: (c) Consider the reduced game in Table 4. Calculate the payoff for each player using the following…
A: Given information
Q: Which of the following apply to bonds? Select all that apply. Earn gains from dividends Earn gains…
A: In the mentioned question we have been asked about the details of what Bond is.
Q: he marginal product of the 14 th worker is 8 and the firm sells its output for $4 per unit. If labor…
A: MP of 14th worker = 8 Output sell = $4 per output
Q: The table below shows revenue data for different firms producing cleaning products. Use the given…
A: We have 5 firms with different revenues and thereby different market shares.
Q: A company faces a recession. It has several strategic options to choose from. The company is willing…
A: Introduction During recession best strategic option for a company is partially cut the prices and…
Q: Use the World View to answer the questions. Be sure to spell the country correctly. WORLD VIEW…
A: Information regarding real growth, inflation and unemployment is given about six countries.…
Q: The following data relate to direct labor costs for the current period: Standard costs 7,100 hours…
A: Answer; The correct option is d) i.e, $8880 favorable. Since, the standard hours is greater than…
Q: Ngugi reveals the cost of war, especially Civil War in his masterpiece, the novel Weep Not, Child.…
A: Human capital refers to a country's current stock of talent, aptitude, expertise, education, and…
Q: 3. A supermarket chain buys loaves of bread from its supplier at $0.50 per loaf. The chain is…
A: The minimum acceptable rate of return (MARR) or hurdle rate in business and engineering economics is…
Q: What are the best decision-making strategies for a firm that relocates in an underdeveloped country?
A: An economy that is undeveloped is one that is characterized by. Low per capita GDP.Maybe less than…
Q: Table below Year GDP (billion AED) CPI (base 2014=100) Popul 2018 1461 111.1 9.367 2019 1511 109…
A: Since you have posted multiple subparts, as per the guidelines we can solve only the first 3…
Q: n general equilibrium, when one of the firms producing goods is a monopolist, it charges price that…
A: The monopolist is the single seller in the market of goods to a large number of buyers which large…
Q: position about Salaries of uninformed personnel have to be the same with that of teachers and…
A: The pay and allowances are the basic cost that is incurred by any firm. But the salaries vary…
Q: Which of the following scenarios does not illustrate a long-run adjustment? BMW builds a new…
A: The long run is a time when firms can change fixed inputs like plants, also new firms can enter the…
Q: which one of the following statements is incorrect Rich people do not expenence scaroty O Because…
A: Resources are limited on this earth which means they will exhaust if their consumption rate is…
Q: A computer platform requires $270,000 initial investment and additional $60,000 after 10 years. The…
A: * SOLUTION :- Given that , Intial investment = $270000 Additional after 10 years = $60000…
Q: 6. Let p(x) = 4 – 0.0002.x be the price (in TL) of each unit of a certain product required to…
A: Price : p(x)=4-0.0002x Cost : C(x)=600+3x Profit=Total Revenue-Total Cost Profit=p(x).x-C(x)…
Q: After graduating from college in 2010, Art Major's starting salary is $30757.00. Suppose Art Major…
A: Answer; Salary of major in 2011 = Salary in 2010 * CPI in 2011/ CPI in 2010 =…
Q: Consider a pure exchange economy, where each consumer has preferences described by a Cobb-Douglas…
A: Introduction We have given a pure exchange economy. In such an economy, an equitable distribution of…
Q: Describe the relevance of taxation for understanding the American welfare state. How have…
A: American welfare state An American welfare state is formed by the government that is formed to…
Q: Panda Toys Inc. plans to sell one line of its panda toys for $ 20. The material cost per unit is $4…
A: Given, Selling price = $20. The material cost per unit = $4 and The unit labor cost = $6. Fixed…
Q: Suppose that Germany (country a) and France (country b) do not have foreign currency controls in…
A: Fiat money is any kind of currency that has been made legal tender by a government edict or fiat.…
Q: CASE STUDY: Since becoming an independent nation in 1965, Singapore has been on the rise…
A: Globalization, is the course of connection and reconciliation among individuals, organizations, and…
Q: Required information A process for producing the mosquito repellant Deet has an initial investment…
A: The term "payback period" refers to the time it takes to return the cost of an investment. Simply…
Q: 7 A firm has this cost function: C = 4000 - 7Q + 8Q2. The firm is currently producing 5 units of its…
A: Cost Function = C = 4000 - 7Q + 8Q2 where Q = 5
Q: What is the role of the central bank in the financial sector and economy as a whole
A: Hi! Thank you for the question As per the honor code, We’ll answer the first question since the…
Q: What are the major learning outcomes from studying macroeconomics course?
A: Macroeconomics is a feild of study that deals with economy as a whole. It basically deals with…
Q: Name (Print): Course: AS/AD Draw a macro equilibrium using AD/AS. Clearly label all important points…
A: Concept The AD-AS model, which includes AD or aggregate demand, short-run aggregate supply or SRAS…
Q: cation systems are being con n China. Doing nothing is e data below and state yc ng this problem…
A: *Answer:
Q: Explain why a fast-food restaurant often displays characteristics of perfect competition.
A: The structure of a market where the consumption or production of goods and services do not tend to…
Q: Required information A process for producing the mosquito repellant Deet has an initial investment…
A: Initial Investment = 200,000 Annual Cost = 43,000 Income = 90,000 per year
Q: Consider the following Keynesian macroeconomic model Y = C +1+G C = 200 + 0.8Y = 1000 – 2000R -…
A: Here, We are given that, Y=C+I+G ..(1) C= 200 + 0.8Y ..(2) I=1000 - 2000R ..(3)…
Q: Economy: you should provide an account of your short-term and long-term economic modes of…
A: In financial matters, fathom the capability between the short run and the slong run. Coincidentally,…
Q: Is the dynamics of the Law of Contract as per the civil code a myth with relation to a business…
A: The article also summarises the laws governing employment interactions, such as redundancies and…
Q: 2) Draw the PF & Labor Market model assuming that initially the country Austria had 200,000 workers…
A: Given that; Austria had 200,000 workers at a wage of $20.00 per hour and producing close to $2.5…
Q: Long Run: Draw a long run aggregate supply curve. Draw an aggregate demand curve and label it ADI.…
A: Concept Price can alter along the LRAS, but output cannot since it reflects full employment output.…
Q: How does education and central-city fiscal problems impact the housing values of a city?
A: Cities' expansion can significantly influence the local working class, particularly municipal…
Q: [Q#7c] Given the answers to the previous two questions, and the M3 money supply soaring to $21…
A: Fed increases the money supply by purchasing securities and bonds in the financial market. As the…
Q: In one paragraph, concisely explain the historical connection between evolutionary biology and long…
A: Evolutionary economics influences both mainstream economics and a heterodox school of economic…
Q: ou are the only seller of Melba sauce in the Albany region. The local demand for jars of Melba sauce…
A: monopoly is the form of market where a single seller sale the products sin the market and charge…
Q: Suppose China produces only cars and trucks. The resources that are used in the production of these…
A: The production possibility frontier (PPF) is a curve that depicts the maximum amounts of two items…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019.Classic BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 1,000 Deposits 3,000Securities 2,000 Equity 7,000Loans & Advances 1,000Property, Plant and Equipment 6,000 .10,000 10,000 Prudent BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 600 Deposits 2,500Securities 1,500 Equity 4,400Loans & Advances 800Property, Plant and Equipment 4,000 .6,900 6,900Assume a required reserve ratio of 10%.(a) What is the amount of excess reserves in this commercial banking system? (b)What is the maximum amount that the money supply can be expanded? What would be the effect of a fall in reserve ratio to 5%, on the maximum amount that the money supply can be expanded? (c) Determine the stock of broad money supply assuming the non-bank public holds…Assume we have a simplified banking system in balance-sheet equilibrium. Also assume thatall banks are subject to a uniform 10 percent reserve requirement and demand deposits arethe only form of money. A commercial bank receiving a new demand deposit of $100 wouldbe able to extend new loans in the amount of: Group of answer choices $1,000. $10. $100. $90.Recognize thehistorical context ofthe development ofthe central bankingsystem
- Assume we have a simplified banking system inbalance-sheet equilibrium. Also assume that allbanks are subject to a uniform 10 percent reserverequirement and demand deposits are the onlyform of money. A commercial bank receiving anew demand deposit of $100 would be able toextend new loans in the amount ofa. $10.b. $90.c. $100.d. $1,000.What is Domestic Systemically Important Bank (D-SIB) and Global Systemically Important Bank (G-SIB) ? How the mechanism of both ? Explained with comprehensiveThe Minsky Model of a Financial Crisis . Economist Hyman Minsky believed “…the financial system in a market economy is unstable, fragile, and prone to crisis.” Explain in some detail how the financial system is “unstable, fragile and prone to crisis,” according to Minsky What did the psychological term euphoria mean to Hyman Minsky? In other words, define the term as Minsky would define it Briefly specify (but do not explain) the primary case against the market system of economic organization
- a. Suppose a certain bank has $5M in capital, demand deposits totaling $40M, holds 15% reserves, and invests solely in high-risk loans. Sketch out this bank’s balance sheet.b. Now suppose that 10% of the loans completely default. What does this bank’s balance sheet look like? Hold demand deposits constant for this question.c. Finally, assume depositors, fearing insolvency, withdraw $15M from the bank. The bank can sell loans only at a 25% discount. Barring any inter-bank borrowing, does this bank remain solvent? Why or why not?Consider the model of supply and demand for central bank money. Assumethat there there are commercial banks. Suppose that people hold 20% of their moneyin currency and 80% of their money in deposits. The central bank sets the reserve-todeposit ratio at 10%. In the first period, the central bank increases the supply of moneyby $200, buying bonds through Open-Market Operations. Use this information to answerthe following questions:(a) For the second period (after the central bank has injected $200 in theeconomy), calculate: (i) the demand for currency, (ii) the amount of deposit held atthe commercial banks, (iii) the demand for reserves held at the central bank, and(iv) the demand for the high-powered money. How much is the additional moneysupply created at the end of the second period?2(b) How much is the additional money supply created at the end of the thirdperiod?(c) As time continues, additional money supply will be created. Calculatethe total increase in the money supply as a…Which of the following factors pose a limit on the ability of commercial banks to increase the quantity of money in circulation by extending new loans? Select one or more: a. the quantity of Central Bank reserves that they own b. the quantity of money that savers lent to them by opening deposits c. the behavior of households and firms, which reduce the quantity of money in circulation by repaying previous loans. d. the availability of profitable lending opportunities in the economy e. the willingness of household and firms to take up new debts at the given interest rate
- assume (i) Consumers spend $200 billion plus 80% of after-tax income, or C=200+0.8 Yd (ii) Investment demand varies inversely with the interest rate, such that I= 500-2000r (iii) Currently government spending and taxes are both $250 billion, or G=250 and Tx=250, (iv) The total money demand or liquidity preference schedule for this economy is an inverse function of the rate of interest and is given by the equation MD=850-1000r (v) The required reserve ratio for banks in this economy is 20%. No bank holds excess reserves, and everybody keeps their money in the bank. The total of reserves in the banks is $150 billion. Answer the following questions given the information above. a) The central bank wants national income to be $3000 billion. What must investment be for the equilibrium level of national income to be $3000 billion (if investment alone changes in response to the change in the interest rate)? b) At what interest rate is this level of investment (your answer to part (a))…(i) Why does the W–M–M theorem hold in the analysis of Chapter 22 but not in the analysis presented in this chapter? What is the critical difference in the assumptions that changed this finding and what is your own assessment of their plausibility? Does the W–M–M theorem hold or not hold in modern developed economies? Does it do so in the LDCs with poorly developed financial markets? Discuss.(ii) If currency (a fiat money) is intrinsically useless for firms and households, are demand/checking deposits also intrinsically useless for them? Why, then, do they hold these when there are other highly liquid assets such as savings deposits and money market mutual funds (MMMF) that offer higher returns than demand deposits? If the only demand for checking deposits is for holding savings, as in the OLG models of money, why do banks offer such checking accounts and not confine themselves to savings and term deposit accounts? Why do they offer the latter rather than…Economics Consider the model of financial intermediation seen in Chapter 3. Money is denoted by M, currency by C and demand deposits by D. Currency in the economy is initially $4,000, so C = $4,000. Suppose households deposit all of their currency in “Firstbank”. 1. Suppose banks hold 100% of deposits as reserves. Then the money supply is 2. Suppose that banks hold only 30% of deposits as reserves, and lend 70% of deposits. Right after Firstbank lends some of the deposits to borrowers, and before borrowers deposit the money from the loans, the money supply in the economy is
