____   73.   If a nation imposes a tariff on imports,

____   74.   Exchange rates determined by the forces of demand and supply are called

____   75.   Who among the following is most likely to favor an appreciation of the U.S. dollar?

____   76.   If the United States experiences an economic boom, compared to other countries, how will this affect the value of the U.S. dollar?

____   77.   If a country is in a strong upward phase of the business cycle, one can expect that its currency will

____   78.   The exchange rate of Country X is set by government decisions and maintained by government actions. Country X follows a

____   79.   An important effect of foreign currency speculators is that

____   80.   For a major country with extensive capital flows, what is the effect of an increase in interest rates?

Consider a community with ten persons.

a. Plot the Lorenz curve for the income distribution (2,2,4,6,8,20,30,40,60,100)

b. Consider an income redistribution that takes 20% of income from each of the three richest individuals and distribute equally to individuals that have an income below the poverty line(9). Plot the Lorenz curve again to demonstrate that inequality has decreased.

c) Show on the same diagram the Lorenz curve for the income distribution (8,18,20,22,26,28,30,32,40,48)

Two laser machines (A & B) used in eye’s surgeries are being compared to choose one of them for a medical center specialized in eye’s treatments. The price of machine A is 1,200,000 Dhs and requires an annual maintenance of 100,000 Dhs, while the price of machine B is 1,000,000 Dhs and requires an annual maintenance of 120,000 Dhs. The expected life time for both machines is 8 years after which the two machines salvage values will be 150,000 Dhs for machine A and 125,000 Dhs for machine B. The MARR decided by the medical center administration is 9% per year.

Perform a future worth analysis to decide which machine is better to be bought by the medical center.

The UAE government is going to build a bridge between two of its islands in the Arabian Gulf Sea to allow the residences of these two islands to communicate with each other’s and with the rest of the country. The government will sign a long time contract with the biggest international company in this field to be responsible for this project.

The government will pay an initial cost of 100,000,000 Dhs, a major re-design to fix any bugs in the initial design after 10 years of 35,000,000 Dhs, a major maintenance every 15 years of 15,000,000 Dhs, an annual maintenance of 6,000,000 Dhs for the first 6 years, and then an annual maintenance of 11,000,000 Dhs after that. The annual interest rate for this project is 8%.

1. Draw an LCM cash flow diagram for the first two cycles of the project from the government’s point of view.

2. If this project lasts for indefinite time then find the approximate equivalent value now.

Assume that the high costs of performing under a contract cause the promisor to breach the contract and pay perfect expectation damages to the promisee. Would the promisee have preferred that the promisor perform? Explain your answer.

What are reliance damages? Would it be efficient if the only remedy for a breach of contract were reliance damages? Explain.

1.What will happen to the price in a competitive market in the long run? Draw a graph of the entire market (all firms versus all consumers) to illustrate why this happens.

a.What are the characteristics of a competitive market?

b. With the market back at market equilibrium, what is the consumer response given that a single firm raises its price above the equilibrium price?

c.If a firm finds out that there are a lot of consumers willing to buy the good if they lower their price below the long-run market equilibrium price, will they do so? Why or why not?

d. How would a price rise initiated by most of the firms in a market cause a different response than that of a single firm, as depicted in part b?

Please show all steps:

An asset was purchased for $80,000. It has a 5 year life. The asset is expected to have a salvage value of $10,000 after the five years. Show the depreciation and remaining book value for this asset for each of the 5 years using Double Declining Balance depreciation.

Show graphically the following situation. A typical dairy farm is initially breaking-even. Show the profit-maximizing level of output and labeled it q*. Next, show how a decrease in milk prices due to COVID-19 will affect the dairy farm. You will need to draw another demand curve and any cost curves to show the situation. Will the firm be still breakingeven? Label the new level of output produced by the firm as q2. Assume that the dairy farm is still able to keep producing.

Why is it that if an industry is operating under conditions of internal scale economies then the resultant equilibrium cannot be consistent with the pure competition model?

a) What is the difference between government budget deficit and national debt?

b) What is a sovereign debt crisis? Why do we need to look at the national debt as a percentage of country’s GDP instead of just in terms of trillions of dollars?

c) Carefully explain why an increase in debt-to-GDP ratio would lead to a higher deficit? (You should describe 3 links connecting debt-to-GDP to deficit). Why is this a problem?

a) Using the AS-AD model, graphically illustrate and describe in words what happens to the long-run and short-run equilibrium level of aggregate output and inflation, when the economy is hit by a negative demand shock and the fiscal policy responds to the shock. Make sure you properly label all the axes and curves. Be specific to describe how the fiscal policy can act in this case.

b) Describe the government spending multiplier and how it would affect the fiscal policy response above in part (a).

c) Now, suppose the economy is at the zero lower bound and output is below potential due to a negative demand shock. Explain in words and using the AS-AD model why in this case the fiscal policy impact would be likely bigger and more helpful for the economy?

HISTORY 1930s--- Which of the following programs of the 1930s initiated under Roosevelt’s presidency sought to enforce industrial production quotas, prices, and wages, and was declared unconstitutional by the Supreme Court due to the program bringing too much government control over individuals’ use of their private property?