10. What are the three monetary policy tools of the Fed? Briefly describe how each tool can be used to implement an expansionary monetary policy and a contractionary monetary policy.

Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $3.50$3.50, and the equilibrium quantity is 35.035.0. When the price is $9.75$9.75, the quantity supplied of cat food is 59.059.0 and the quantity supplied of dog food is 107.0107.0. For simplicity of analysis, the demand for both goods is the same.

Using the midpoint formula, calculate the elasticity of supply for dog food. Please round to two decimal places.

Why is business ethics unavoidable?

why is Argentina a developing country ?

Do you think that CAFTA will have a major impact on the U.S. economy? Why?

If banks must hold $4 in reserves for each $10 in deposits, and the public decides to hold $2 in currency for each $10 in deposits, then how much money can be created by each $1 of the monetary base? Please type your short answer below. (Formatting will not be preserved.)

In national accounting terms, what is the meaning of value added? Please type your short answer below

Improved technology and worker training, leading to higher productivity, will shift the short-run aggregate supply curve to the right but will have no effect on the long-run aggregate supply curve. Do you agree or disagree? Explain your answer.

Please type your short answer below. (Formatting will not be preserved.)

An increase in real income causes the money demand curve to shift to the right. Do you agree or disagree? Explain your answer.

A variable, like the Fed’s discount rate, is an example of which of the following?

Real GDP is _________ GDP adjusted for changes in _________.

A professional couple wishes to purchase a new home costing $750,000, make a 20 percent down payment, and finance the remaining $600,000. The rate quoted for a conventional 30-year loan is 6.5084 percent interest with 1.875 points and no other closing costs. If, immediately after the one hundred twentieth payment (10 years), the professional couple decides to sell the house, what will be the unpaid balance on the loan with the points added to it?

Under what conditions would it be possible for an excise tax to have no efficiency cost and, in fact increase economic efficiency? Show this graphically. Support your answer with an example of something that has a perfectly inelastic supply or nearly perfectly inelastic supply.

State whether each of the following events will result in a movement
along the demand curve for McDonald’s Big Mac hamburger or whether
it will cause the curve to shift. If the demand curve shifts indicate
whether it will shift to the right or to the left, and draw the graph to
illustrate the shift. Briefly explain your answers.

a. The price of Burger King’s Whopper hamburger declines.

b McDonald’s distributes coupons that offer a $3 discount on the
purchase of a Big Mac.

c Because of the shortage of potatoes, the price of French fries
increases.

Given a value of the money supply that the Fed chooses, the equilibrium interest rate can be read off of the money demand schedule. The quantity of money demanded (Md) depends negatively on the interest rate. An increase in P and/or Y shifts the money demand curve to the right. Assume that the inverse money demand is given as r = (10+Y) -0.05 Md. Y =$19.1 (trillion) and Ms=581.1. Using Excel create a spreadsheet with the column headings Ms, r, Md, and M*P. Let’s sstart with no inflation, i.e., P=1.00. Fill in the spreadsheet’s cells for r= 0.035 to r=0.060 in increments of 0.001. (Note: All your answers should be rounded to the nearest thousandth (third digits after the decimal point. Ex: 0.0143 =>0.014, 0.1866=> 0.187) What is the equilibrium interest rate? ______ How much of the money is demanded by the economy at the equilibrium interest rate? ______ Assume that the nation’s GDP increased from 19.1 to 19.2. What happens in the money market at the existing interest rate? ______ (shortage or surplus) of money by $ ______ What is the eventual interest rate as a result of increase in GDP? ______ Assume that the price level increased by 0.5% during the year. GDP remains at $19.1 (trillion). What happens in the money market at the existing interest rate? ______ (shortage or surplus) of money by $ ______.

How does the Ricardian equivalence view of the effect of tax cuts (and budget deficits) differ from the traditional view? What objections to the Ricardian equivalence view have been raised? In your answer, please make sure to clearly define what Ricardian equivalence theorem is.

20) Because of economic growth, a larger portion of the population can shift from ________ to ________.

A) recycling old products; disposing of old products

B) disposing of old products; recycling old products

C) producing new products; developing new products

D) developing new products; producing new products

21) Because their citizens want a greater variety of goods and services at lower prices, many governments have ________.

A) reduced their restrictions on the international movement of goods and services

B) acted to reduce the pressures created by global competition

C) sought to eliminate reciprocal advantages negotiated through international organizations and treaties

D) increased their participation in multinational problem-solving efforts

22) Which of the following is a reason for recent governmental relaxation in restrictions on cross-border trade or resource movements?

A) Most countries face shortages of workers, so they seek foreign workers who can help them produce more.

B) Governments believe that this will decrease the need to make their own companies more innovative.

C) Consumers increasingly want to buy goods and services produced in their own countries, making restrictions less necessary.

D) Governments believe that domestic producers will become more efficient as a result of foreign competition.

23) Which of the following is a reason for recent governmental relaxation in restrictions on cross-border trade or resource movements?

A) Governments typically welcome the opportunity to increase the offshoring of a country's domestic producers.

B) All countries have signed binding reciprocal trade agreements through international organizations.

C) Governments hope that other countries will lower their barriers in response.

D) Most countries face surpluses of workers, so they seek foreign markets in need of labor supplies.

24) A company starting out with a global focus, usually because of the international experience of its founders, is called a ________.

A) multinational enterprise

B) transnational company

C) strategically allied company

D) born-global company

25) In a strategy known as ________, many new companies locate themselves near competitors and suppliers.

A) offshoring

B) franchising

C) clustering

D) exporting

26) Companies often expand their business internationally in response to ________.

A) increased import restrictions in their domestic markets

B) competitive international advantages gained by their competitors

C) increased export restrictions in their domestic markets

D) a decrease in domestic competition

27) When a company successfully responds to foreign production and market opportunities, ________.

A) other companies will likely emulate its successful practices

B) it likely has a long-term advantage over competitors

C) it typically downsizes its domestic operations

D) its home government likely raises taxes on the company

28) According to your text, which of the following is NOT one of the three main reasons governments cooperate with each other?

A) to attack problems that one country acting alone cannot solve

B) to deal with areas of concern that lie outside the territory of any nation

C) to gain reciprocal advantages

D) to encourage cross-border movement of resources in response to interest rate differences

29) Governments have signed treaties to protect foreign-owned property rights, such as investments and patents. A primary reason for doing so is to ________.

A) gain reciprocal advantages

B) reduce the domestic effects of other countries' economic policies

C) deal with areas of concern outside the territory of any one country

D) reduce national conflicts leading to violent encounters

30) Which of the following is NOT a source of disagreement about the use of noncoastal areas of the oceans, outer space, and Antarctica?

A) There is little short-term business potential in these areas.

B) There is disagreement about how commercial benefits should be shared among nations.

C) There is disagreement about who should be allowed to develop where.

D) The commercial viability of some areas has only recently been demonstrated.

31) Which of the following is a reason that governments cooperate through treaties, agreements, and consultation?

A) to gain a division of labor, such as by performing research and development in one country and production in another

B) to be in compliance with United Nations' requirements

C) to attack problems jointly that one country acting alone cannot solve

D) to assure that all countries get an equitable share of taxes from multinational enterprises

32) Small countries worry about overdependence caused by globalization. Their concerns include all of the following EXCEPT which of the following?

A) A large country on whom they depend may pressure them on political matters.

B) A large international company may dictate its terms of operations in a small country.

C) A large company may exploit legal loopholes to avoid political oversight and taxes.

D) A large country may reduce its level of cultural homogeneity.

33) Although critics complain that globalization causes the consumption of too many nonrenewable resources while despoiling the environment, those in favor of globalization counter that ________.

A) globalization encourages the adoption of uniform and superior standards for combating environmental problems

B) economic growth created by globalization is largely in services, which neither use too many nonrenewable resources nor despoil the environment

C) the biggest problem of environmental despoliation occurs in the countries that are least globalized

D) pollution and toxic runoff problems do not increase with economic growth

34) Curtailment of logging in the Amazon region is generally viewed as environmentally beneficial for the planet as a whole. However, unemployed Brazilian workers have felt that job creation inside Brazil is more important than climate protection outside Brazil. This example best illustrates which of the following?

A) why smaller countries are concerned that large international countries are powerful enough to dictate operating terms

B) why globalization is needed to foster uniform standards for combating environmental problems

C) how global interests can conflict with a country's local interests

D) how cultural homogeneity threatens the cultural foundation of smaller nations

35) Although globalization may bring economic growth, critics nevertheless contend that ________.

A) the growth is not fast enough

B) the inequality of gains puts some people in a relatively worse economic situation

C) this growth is mainly for the future, thus ignoring present economic growth needs

D) the cultural foundations of sovereignty are supported by globalization

36) The process of shifting production from a domestic to a foreign location is known as ________.

A) offshoring

B) outsourcing

C) licensing

D) joint venturing

37) Proponents of offshoring claim all EXCEPT which of the following?

A) Aggregate employment figures show that displaced workers find new jobs.

B) Offshoring increases the number of high-value jobs in the home countries of offshoring companies.

C) Offshoring is fundamentally better for workers than the introduction of labor-saving technologies.

D) There are upper limits on offshoring because there are not enough workers abroad with needed skills who will permanently work for low wages.

38) A major criticism of offshoring is that it ________.

A) increases production costs

B) exchanges good jobs for bad jobs

C) threatens the sovereignty of larger countries

D) allows companies to avoid payment of any taxes

39) Critics of offshoring claim all EXCEPT which of the following?

A) Cost savings are seldom passed on to final consumers.

B) Workers who have been displaced by offshoring do not have the skills needed for higher-value jobs.

C) Incomes of workers in offshoring countries have gone down as a percentage of national income.

D) Offshoring reduces the incomes of people in low-wage countries.

40) Which of the following conditions must be met for a company to increase profits through foreign sales?

A) The company can obtain resources abroad.

B) The costs to make the sales do not increase disproportionately.

C) The company can offshore its production.

D) The foreign market can be reached through exporting rather than direct investment.