1. Suppose that the money supply increases substantially. Explain what happens throughout the following steps.
2. a. Explain how the change in the interest rate affects international demand for Canadian financial assets. How does this then affect the exchange rate?
3. b. What effect does the change of the exchange rate have on net exports
4. c. How do the combined changes in consumption, investment, and net exports affect the AE curve and the AD curve
5. d. Suppose that prior to the increase in the money supply, equilibrium GDP was equal to potential GDP. What type of output gap now exists? If potential GDP does not increase, what will happen to equilibrium GDP in the long run?
6. e. Based on your answers above, can expanding the money supply drive long-run growth? What is this relationship called?

The town of Cypress Creek is preparing to go to war against the American government. To do this, it is building a giant satellite laser! To build the laser, the government of the town will resort to taxation to fund its expenditure. The initial economy of Cypress Creek can be expressed by the following agents:

Consumers, C = 25 + 0.95(Y-T)

Output, Y = 5000

Government expenditures, G = 2000

Taxation, T = 2000

Investors, I = 750-125r

Markets are fully competitive and the equilibrium condition for markets are:

Goods and service market: Y =C + I + G

Financial market: I = S

When it builds the Satellite, government and taxation change to  

Government expenditures, G = 4000

Taxation, T = 4000

Hank Scorpio, the towns' founder, announces that "even by increasing government spending and taxation, we are not worst off, as production has not changed!"

1. [2 points] check to make sure output does not change.
2. [2 points] find the consumption level in both scenario's (low and high government spending).
3. [3 points] who is paying for the burden of taxation? (how is this new spending/taxation being distributed between investors and consumers)
4. [2 points] as the government increases its spending (G from 2000 to 4000) why won't output change?

Hank Scorpio makes another announcement "People of North Haverbrook! We must all work together in this to crush the American Government - I implore you to save you wages! Don't spend!"

13. [2 points] by how much would consumers need to reduce their Marginal propensity to consume (MPC) such that the market clearing interest rate does not change?  

What was the gold standard? How is monetary policy conducted under a gold standard? What are the virtues of a gold standard, according to Meltzer? What would be a shortcoming of a gold standard?

Consider the following three models that a researcher suggests might be a
reasonable model of stock market prices
yt = yt−1 + ut
yt = 0.5yt−1 + ut
yt = 0.8ut−1 + ut
(a) What classes of models are these examples of?
(b) What would the autocorrelation function for each of these processes look
like? (You do not need to calculate the acf, simply consider what shape it
might have given the class of model from which it is drawn.)
(c) Which model is more likely to represent stock market prices from a
theoretical perspective, and why? If any of the three models truly
represented the way stock market prices move, which could potentially
be used to make money by forecasting future values of the series?
(d) By making a series of successive substitutions or from your knowledge of
the behaviour of these types of processes, consider the extent of
persistence of shocks in the series in each case.

Consider a positive supply shock, i.e. a sharp decrease in energy prices. Show how the economy adjust to the Medium-Run equilibrium, and discuss how the FED determines the policy rate. Use the IS-LM-PC model to graph your answer.

Suppose the market demand and supply functions are Qd= 32,000-20P and Qs=30P+750. You have just graduated and moved to this city; as a new MBA and an entrepreneur, you are considering entering the market for this product.
a. Determine the equilibrium price and quantity in this market.

b. TC=5000+1000Q-12Q^2+0.08Q^3. Determine whether or not you should enter this market.

c. Due to unforeseen delays, you don’t enter the market. However, a year later the market supply has changed to Qs=30P+1500. Are you surprised at this shift in supply?

d. Given the new supply conditions, determine whether or not you should enter the market.

If optimal capacity of a university is 4000 students and the current students is 3500 students, implement the concept of economics to scale capacity strategy to determine the maximum number allowed to be accepted for the new academic year

Write a small essay on What is the Hanushek critique? Do you think it accurately portrays the relationship between inputs and outputs in education? Why or why not? What evidence supports your argument?

1) describe what is meant by Tiebout choice. Do you think Tiebout choice provides for enough choice for parents over where their child attends school? Why or why not? What are the advantages of Tiebout choice? What are the disadvantages of Tiebout choice? What assumptions does the Tiebout choice model rely on in order for it to be efficient?

Researchers claim that there is positive relationship between economic development and democracy in a country. Yet the case of China seems to contradict this general pattern of findings. According to this what may explain the persistence of the Communist party dictatorship in China despite the rise of its economic prosperity since the 1980s?

Define Life on Land

How does Land affect production

How does Land affect consumption

How is Life on Land good for Sustainable Development

please include the sources that you used to find the answers to there questions

Should the government regulate the natural monopoly? Explain.

How does advertising impact monopolistic competition?