Assume you are the marketing manager for Oreo cookies. You can use coupons, premiums, sweepstakes or product placement to promote your product. Choose one of these methods to promote your product to ultimate consumers and another one to promote your product to retailers Explain why you chose each for your target market.

The government is considering building a major infrastructure project at a cost of €200m. The expected benefits of the project are €500m. (i) Based on the Kaldor-Hicks criteria should the government implement this project? Justify your answer. (ii) A project that satisfies the Kaldor-Hicks criteria is always guaranteed to increase aggregate welfare. True or false? Explain your answer using a numerical example. In your example use the cost and benefits of the project outlined above ( approx 160 words total)

Consider an economy that initially has a labor force of 2000 workers. Of these workers, 1900 are employed and each works 40 hours per week. 10 units of output are produced by each hour of labor. There are another 1500 adults in the economy who are not in the labor force.

A) What is the labor force participation rate?

The economy then enters a recession. Employment falls by 4%, and the number of hours per week worked by each employed worker falls by 2.5%. In addition, 0.2% of the labor force becomes discouraged at the prospect of finding a job and leaves the labor force.

B) After all of these changes, what is the new size of the labor force?

C) How many workers are unemployed now?

D) What is the new unemployment rate?

Joe owns a tree cutting company. His firm uses tree cutters (L) and equipment (K) in cutting trees. Suppose that the cost of hiring a tree cutter (w) is $10 an hour and the cost of using equipment (r) is $30 an hour. We will consider how much K and L Joe should use to cut 75 (i.e., Q = 75) trees. (Make sure that you specify intercepts, optimal amounts of K and L and isoquants clearly on graphs.)

a) Suppose that Joe’s production function is Q = 15K + (2.5)L. Marginal product of capital MPK = 15, and marginal product of labor MPL = 2.5. What are the values of the cost-minimization bundle of K and L? Draw his isoquant and isocost curves and identify the firm’s cost minimizing combination of K and L to represent the cost minimization solution on the graph.

b) Suppose that Joe’s production function is now Q = KL. Joe’s marginal product of capital and labor are MPK = L and MPL= K, respectively. What are the values of the cost-minimization bundle of K and L? Draw his isoquant and isocost curves and identify the firm’s cost minimizing combination of K and L to represent the cost minimization solution on the graph.

c) Suppose that the wage rate increases to $15 per hour. For each of the production functions identified in parts (a) and (b), identify what will happen generally to the optimal amounts of K and L. (Just identify whether K will increase, decrease or stay the same and whether L will increase, decrease or stay the same. You do not have to solve for the exact changes.) Justify your answers using graphs.

Define the following:

5. Golden rule level of capital

6. Natural rate of output

7. Steady state

8. J-curve

define the following:

9. Crawling pegs

10. Currency board

11. Speculative attack

12. Secular stagnation

Define each:

1. Quantitative easing

2. Forward guidance

3. Okun’s Law

4. NAIRU

1. Exchange rate crises

1. Explain how the central bank actually fixes the exchange rate.  What does this imply about the proximatecause of an exchange rate crisis with a fixed exchange rate? (2 pts)

2. Why do exchange rates crises tend to be more costly in emerging markets (i.e. poor/middle income countries) than in rich countries? (2 pts)

1. This question is on fixed vs. floating exchange rates.

1. Describe the major benefits and costs of fixing exchange rates. (2pts)

2. Explain how monetary policy coordination works in a fixed exchange rate system.  What is/are the major obstacle(s) to such coordination? (2 pts)

a. Find information on the trade balance for the US and find the comparable measures for the country you have chosen (UK) for the past three years. Discuss the trend of the balance of trade for each country.

b. For the currency in each country (the dollar in the US and whatever the currency is called in the country you chose), find the exchange rates for the previous three years. For the US, find the exchange rate with the Euro, the Japanese Yen, and the British Pound. For your selected country, find the exchange rate with the US dollar, the Euro, and the Japanese Yen. Describe the trend of exchange rates for each currency over the three-year period — is the currency appreciating or depreciating against the other currencies? Explain how this pattern of the currency can impact the economy.