Suppose the federal government is concerned about long-run economic growth. Suppose many lawmakers watched Robert Gordon's TED talk and are worried that the U.S. will not experience significant gains in productivity in the future. To combat this, the government enacts a tax credit to encourage firms to develop new technologies that can increase labor productivity. What this means is that if firms undertake large research and development projects the government will reimburse them for some of their expenses. At the same time, the government makes interest earned on savings tax exempt. Instead of having to pay income taxes on interest earned on savings accounts, interest income is now tax free.

Using the market for loanable funds illustrate the impact that these two new policies will have on the real interest rate and the level of savings and investment in the macroeconomy. In addition, please explain why you shifted any curves that you did.

in economic terms, how would you describe Saudi Arabia and Russia's oil price war?

President Dwight Eisenhower is credited with the establishment of a national network of controlledaccess roadways–now simply called “Interstates”–authorized under the Federal Aid Highway Act of 1956. The road construction and growing popularity of highway travel presented an opportunity for PQMaps, which created and sold maps for highway drivers. The paper maps were printed in color and folded for drivers’ convenience. In 1960, the PQMap’s total cost curve was given by 15 + 0.6Q + 0.01Q 2 where Q was measured in standard bulk units of printed material. PQMap’s marginal cost was 0.6 + 0.02Q.

12. What was the firm-level supply curve for PQMap?

13. Suppose there were 5 map printing companies operating in the U.S. in 1960. All of the firms are price-takers. What was the market-level supply curve for highway maps?

14. Suppose that the market demand for printed maps in 1960 is given by 9300 − 722P. What was the equilibrium price and quantity of highways maps in America in 1960?

15. Suppose that you are an analyst who is interested in the map production industry. You already have the equilibrium price and quantity data for 1960. As you do more research, you find recent a statistic for the market. You learned that, in 2015, roughly 1,200 bulk units of paper highway maps were sold at a price of $6. What must have happened in the map printing market between 1960 and 2015? You can speculate, but you must justify your argument. (Hint: Start with a graph.)

Moreover, what is the impact of trade surplus (exporting more than importing) and trade deficit (importing more than exporting) on GDP, employment, and the exchange rate of the country's currency?

1. The economy's income and expenditure

The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs.

Based on this model, households earn income when   purchase   in markets for factors of production.

Suppose Eleanor earns $625 per week working as a jewelry appraiser for Classy's Jewelry Store. She uses $9 to have breakfast at Dinah's Diner. Dinah's Diner pays Darnell $325 per week to work as a short-order cook. Darnell uses $100 to purchase a necklace from Classy's Jewelry Store.

Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services.

Which of the elements of this scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or outputs. Check all that apply.

The $325 per week Darnell earns working for Dinah's Diner

The $100 Darnell spends to purchase a necklace from Classy's Jewelry Store

The breakfast Eleanor receives

True or False: Gross domestic product (GDP) measures total expenditures on final goods and services during a given period of time.

Organizations are currently open systems. Why are organizations considered open systems as opposed to closed systems? Explain various concepts/ways that help organizations be or become open systems. How can organizations remain open when the world is asked to socially isolate?

Which government policies are especially important in the decision about where to locate an international facility? Why do free trade zones often influence the location decisions of international businesses?

1. Recently the United States has renegotiated several trade deals before the outbreak of the Coronavirus. Then, as countries have isolated themselves, international trade has suffered. Analyze the specific trade deals with policy papers or books from economic think tanks. Identify possible unintended consequences using supply-and-demand graphs, comparative advantage determining trades, and elasticity.

Assume that the supply for a product is given by the function: Qs = 20P and the demand by Qd = 1000 - 5P, where P is the value and Q is the quantity of the product, respectively.

(a) Calculate the value and quantity of equilibrium.

(b) If the government decides to impose a tax of € 10, determine which curve will be moved and in which direction: i. if the tax is collected by consumers. ii. if the tax is collected by the producers (ie tax on production).

(c) The government has finally decided to impose a € 10 tax and the tax will be collected by consumers. Identify the new equation of the curve that has shifted, due to the imposition of taxation and calculate the price and the amount of equilibrium, after the imposition of the tax of 10 €.

(d) Determine how much of the € 10 tax will be borne by consumers and how much by producers. Explain your answer.

1) Use the current oil crises to describe the shape of the kinked demand curve that oligopolies face.

2) Do you expect oil priced to jump back up, why/why not? When?  

3) What are some of the pros and cons of cheap oil? Do you prefer one set of trade-offs over the other? Please explain.

4) Provide another example of a cartel (see module for Maple Syrup and Phoebus Cartel info) Explain and provide details. Did it last? Why not?

A financial crisis is a form of a large, negative, temporary but persistent demand shock in the money market such that costs of borrowing unexpectedly increases for a given level of money supply.

1. Assume flexible exchange rate system. Use the IS-LM-FX model to illustrate the short-run effects of a financial crisis on output, nominal interest rate, exchange rate and investment.

2. Suppose the goal of macro policy is to stabilize output in the short run. What kind of fiscal policy would you recommend in response to the situation in Question 1?

3. Can we replace your fiscal policy in Question 2 with monetary policy? If you answer yes, explain what kind of monetary policy is desirable. If you answer no, explain why.

4. Suppose that the central bank switches to a fixed exchange rate regime before the financial crisis. How will your answer in Question 3 change?

5. Is it possible that this economy remains stuck in lower output than before financial crisis despite efforts to stabilize output? Explain your reasoning. Does your answer depends on the exchange rate policy?

Show how growth rate of GDP per capita is related to the growth rate of GDP per worker and growth rate of working-age fraction of population. How does the effect of population redistribution reduce the average growth rate of income in the world? Explain this (composition effect) by providing examples.