Given the production function Y=A(K,L,N,H), what is the role of money in generating long run growth in Y? A.) money increases economic trade and thus increase Y B.) money increases prices making it more profitable to produce C.) money plays no role in determining long run economic activity D.) money being the root of all evil harms economic growth
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Given the production function Y=A(K,L,N,H), what is the role of money in generating long run growth in Y?
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A.) money increases economic trade and thus increase Y |
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B.) money increases prices making it more profitable to produce |
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C.) money plays no role in determining long run economic activity |
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D.) money being the root of all evil harms |
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- Y=$10 trillion, K=$10 trillion, L=100 million workers Cobb-Douglas Production Function What is the production function ؟؟؟The main difference between the short run and the long run is that firms earn zero profits in the long run the long run always refers to a time period of one year or longer in the short run, some inputs are fixed in the long run, all inputs are fixed 2 A recession is a decline in the inflation rate that lasts six months or longer the unemployment rate that lasts six months or longer real GDP that lasts six months or longer potential GDP that lasts six months or longerGalaxy, a multinational corporation, has two plants, one in the United States and the other in Mexico, and it cannot change the size of the plants or the amount of capital equipment in the short run. The wage in Mexico is equivalent to US $5 per hour. The wage in the U.S. is $25 per hour. Given current employment situation, the productivity per worker in Mexico is 200 units per hour, and the productivity per worker in the U.S. is 400 units per hour.Is Galaxy maximizing output relative to its labor cost? If not, what should Galaxy do? Justify your
- Long-run: Assume you are examining the economy of India. Assume the Indian economy is initially in equilibrium. Suppose a war breaks out between India and neighboring Pakistan. What happens to Indian equilibrium if 500,000 Pakistanis immigrate to India in the span of a year? Analyze this strictly in the context of production. Group of answer choices real GDP rises, price level rises real GDP rises, price level falls real GDP falls, price level rises real GDP falls, price level fallsConsider an economy in which the aggregate production function is given by the equation: Y = 3.6 K0.5 N0.5 where (Y) is aggregate production, (A) measures productivity, (K) is the stock of physical capital and (N) is the amount of labor, measured in millions of workers. Both Y and K are measured in billions of reais. K is given and is 10,000 (i.e., 10,000 billion reais), so K0.5 = 100. The aggregate labor supply is given by the following equation: NS = [(1-t).w]2 where (t) is the income tax rate on labor and (w) is the real wage, measured in reais per hour. t = 0.20 (20%). The equilibrium levels of the real wage (w) and employment (N) are, respectively, [ANSWER] and [ANSWER]. The full employment production level (Y) is [ANSWER]. Finally, the after-tax real wage that workers receive per hour in this economy iQ 1. Given the following production function Where; Y is the total output of the economy K is the amount of land, and L is the labor force of the economy Assume A=1 and = 0.5 The initial values of K and L is 100 units. a. How much output does the economy produce? b. What are the wage and rental price of land? c. What share of output does land receive? d. If a flood damaged half of the land, what is the new level of output in the economy? e. What is the new level of wage and rent? f. What share of output does land receiving now? Q 2. Suppose in an economy, people hold currency worth of 10,000 Rs and 4000 Rs worth of demand deposits in the only bank. The reserve-deposit ratio is 20%. a. What is money supply, monetary base and money multiplier? b. Suppose the economy only bank is a simple bank. It takes deposits and make loans and has no capital. Show the balance sheet of the bank. c. The central bank wants to increase the money supply. Should it buy or sell the Govt bonds in the…
- True or False? What we call “short-run output,” denoted by Ỹ, is measured in dollars. True FalseWhich of the following statements about a simple circular flow model is false? Producers are buyers in the factor market and sellers in the product market. Households are buyers in the product market. Households are neither buyers nor sellers in the product market. Producers are buyers in the factor market.Thomas Malthus presented a dismal forecast for man-kind, largely due to the effects of population growth. Show that immigration, like population growth, tends to create unemployment in the short run and reduce the standard of living of workers in the long run, even though it does enhance the economy’s ability to produce. (Use diagram and analysis)
- Which of the following statements are true? A basic assumption of the theory of production is that: A firm cannot borrow money to finance its input expenditures. A firm can buy as much labor and capital as it desires in the long-run A firm can reduce the number of workers it uses, but it cannot adjust how much capital it uses in the short-run When the marginal product of labour starts falling, the firm must cease production a. II only b. II and III c. I, III and IV d. II, III and IVFirm X, a leading manufacturer of rubber tires in country A, caters to almost one-third of the domestic tire market. The country was hit by a recession last year that caused the national output growth to be negative. Simon Reeds, the CEO of firm X, feels that these fluctuations in the business environment are short-lived and expects the economy to recover very soon. In spite of the recession, Simon feels that the firm can actually invest in expanding its facilities as it has sufficient cash flows to continue its operation during the crisis period. The firm's marketing head, Sandra Jones, counters this by saying that the firm is already losing sales due to the recession and they should not increase costs further by making large-scale investments in the present climate. Which of the following, if true, would support the CEO's claim? A. The government recently announced a plan to offer incentives to buyers in the car and household appliances market. B.…Firm X, a leading manufacturer of rubber tires in country A, caters to almost one-third of the domestic tire market. The country was hit by a recession last year that caused the national output growth to be negative. Simon Reeds, the CEO of firm X, feels that these fluctuations in the business environment are short-lived and expects the economy to recover very soon. In spite of the recession, Simon feels that the firm can actually invest in expanding its facilities as it has sufficient cash flows to continue its operation during the crisis period. The firm's marketing head, Sandra Jones, counters this by saying that the firm is already losing sales due to the recession and they should not increase costs further by making large-scale investments in the present climate. Which of the following, if true, would support the marketing head's claim? A. In the previous recession, a leading player in the hospitality sector had expanded its facilities but was unable…
