It is said that economic crises (such as the economic recession) can be expected through the performance of financial markets in the period prior to them.

1- What is meant by that?

2- What is your personal opinion?

please respond to the following in a minimum of 175 words:

Explain what happens to the interest rate if the money supply increases or decreases and the money demand remains unchanged. Explain what happens to the interest rate if the money demand increases or decreases and the money supply remains unchanged.

a. Using the concept of price elasticity of demand, explain the conditions under which it would be rational for pharmaceutical companies to reduce the supply of drugs. Explain carefully.

b. Under the conditions you have identified, what do you think the appropriate response of the government should be? Explain your answer.

Scenario: I can get a new bond from a company with a 10yr maturity and and a 5% yield (for par value) or I can buy an existing bond (from the same company) with a 10yr maturity and a 4% yield... Would I pay the same, more, or less for the existing bond (compared to the new bond)... and what risk does this represent when investing in fixed income?

Advertising impact monopolistic competition. Why? Please explain it.

3. What is the effect of an exogenous increase in P in the Keynesian model? What is the effect of an exogenous increase in GDP in the Classical model?

How has sstructural discrimination in regards to African Americans in the United States inhibited economic growth

Horizontal Mergers. Consider a market that initially has two firms selling differentiated products and competing in prices. The cost of production of each firm is C(q)=0. Demand for the two goods is given by the following system: q1=420-4p1+p2 q2=420-4p2+p1 The goal of this question is to find by how much the prices of the goods will increase if the firms horizontally merge. To do this, we first derive the equilibrium prices before the merger, and then compare with the optimal prices set by the merged firm.

a) Firm 1’s profit maximization problem is to choose p1 so as to solve: max [p1 (420-4p1+p2)] p1≥0 Derive firm 1’s first order condition (differentiating this profit function with respect to p1).

b) Assuming in equilibrium p1=p2, find the equilibrium prices before the merger.

c) If the firms merge, and continue to sell the same two products, the merged firm chooses both prices choosing p1 and p2 so as maximize problem. Write the profit maximization problem.

d) Find the profit maximizing prices. You may assume that these prices are equal p1=p2.

which of the below will result in devaluation of euro ?

α. reduction of deficit at the commercial balance of eurozone

b. Increase of interest rate in Eurozone

c. Decrease of interest rate in USA

d. Decrease of inflation in Eurozone

e. None of the above

Consider the following national income model:

? − ? − ?< − ?< = 0

? − ? − ?(? − ?) = 0

? − ? − ?? = 0

where Y= income, C=consumption, I= investment, G= government spending, T= taxes

?, ?, ?, and ? are parameters: ? is positive because consumption is positive even if disposable income (? − ?) is zero; ? is a positive fraction because it represents the marginal propensity to consume; ? is positive because even if ? is zero the government swill still have a positive tax revenue; ? is a positive fraction because it an income tax rate that is less than 100 percent.

?, ?, and ? are endogenous variables whereas ?, ?, ?, ?, ?, and ? are exogenous variable.

Part I. Using the implicit function rule, find the income-tax multiplier that explains how the income tax rate ? causes the (equilibrium) income to change. Does the result make economic sense? Explain its sign and economic implication.

Part II. In the same way, find how the government spending affects the (equilibrium) consumption. Does the result make economic sense? Explain its sign and economic implication.

Case Study-2

International trade theories argue that nations should open their doors to trade Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume and selection of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of WTO (World Trade Organization) and smaller groups of nations, government seems to be crying foul in the trade game now more than ever before.

We see efforts at protectionism in the rising trends in governments charging foreign producers for "dumping" their goods on the world market. Worldwide, the number of anti-dumping cases that were initiated stood at about 150 in 2014, 225 in 2015, 230 in 2016, and 300 in 2017.

There is no shortage of similar examples. The US charges Brazil, Japan, and Russia with dumping their products in the US market as a way out of tough economic times. The US steel industry wants the government to slap a 200 percent tariff on certain types of steel. But car makers in US are not complaining, and General Motors even spoke out against the anti-dumping charges — as it is enjoying the benefits of low cost steel for the use in its auto production. Canadian steel makers followed the lead of the US and are pushing for anti-dumping actions against four nations.

Emerging markets too, are jumping into the fray. Mexico recently expanded coverage of its Automatic Import Advice System. The system requires importers (from a selected list of countries) to notify Mexican officials of the amount and price of the shipment 10 days prior to its expected arrivals in Mexico. The ten day notice gives domestic producers advance warning of incoming low priced products so they can complain of dumping before the product clear customs and enter the market place. India is also getting onboard by setting up a new government agency to handle anti-dumping cases.

Why dumping is on the rise for the first place? The WTO has made major inroads on the use of tariffs, slashing them across every product category in recent years. But the WTO does not have the authority to punish companies, but only governments. Thus the WTO cannot pass judgments against individual companies that are dumping their products in other markets. It can only pass the rulings against the governments of the country that imposes anti-dumping duty. But the WTO allows countries to retaliate against nations whose producers are suspected of dumping when it can be shown that:

i) The alleged offenders are significantly hurting the domestic producers.

ii) The export price is lower than the cost of production or lower than the home market price.

Supporters of anti-dumping tariff claim that they prevent dumpers from undercutting the price charged by the producers in a target market and driving them about of business. Another claim in support of anti-dumping is that it is an excellent way of retaining some protection against the potential dangers of totally free trade. Detractors of anti-dumping tariffs charge that once the tariffs are imposed they are rarely removed. They also claim that they cost companies and governments a great deal of time and money to file and argue their cases. It is argued that the fear of being charged with dumping causes international competitors to keep their price higher in the target market than would have otherwise be the case. This would allow domestic companies to charge higher prices and not loose market shares forcing consumers to pay more for their goods.

Required Question

Questions 01: Based on the above case study, evaluate the effects of dumping on domestic business and also on the consumers

Question 02: As we have seen WTO cannot currently get involved in punishing individual companies for dumping. Its action can be only directed towards governments of countries. Do you think this is a wise policy? Justify your answer.

Use the information below to answer the folloiwng question: Inverse demand function:

P = 300 – 0.5Q

Marginal revenue: MR = 300 – Q

Total Cost function: C = 4000 + 90Q

Marginal Cost: MC = 90

The equilibrium P and Q under Duopoly are: P = 160, Q= 280 with each firm's output = 110

Select one: True False

1) The table below lists the number of people by labor force classification for the country of Grenyarnia.

1. Calculate the number in the labor force, and the unemployment rate.

2. Calculate the number in the adult population, and the labor force participation rate.

3. Suppose 8 million people who were previously employed become discouraged workers. Recalculate the unemployment rate and the labor force participation rate.

4. Why might a favorable change in the economy, such as technological improvement or a decrease in the price of imported oil, be associated with an increase in frictional unemployment?