Fiscal Policy Response:

Student must recommend the Federal Government use Expansionary Mode of Fiscal Policy to deal with the Recession. The student must recommend several specific items for the government to increase its spending in order to inject money into markets and get businesses spending money, as well as putting labor back to work to put money in their pockets to spend as well. Additionally, student must recommend the government LOWER PERSONAL AND BUSINESS INCOME TAXES. This will make both Consumer and Gross Private Domestic Investment Spending INCREASE. As three parts of total spending increase, AD shifts to the right, real GDP increases, which causes unemployment to decrease. If these work as stated, the economy will move into recovery in the business cycle.

Consider the market for aluminum containers. Describe the outcome in the market for the following events. Answer the following questions:

Does supply or demand increase or decrease?

Does market price increase, decrease, remain unchanged or is it undetermined?

Does the market quantity bought and sold increase, decrease, remain unchanged or is it undetermined?

“Changes in government regulations restrict the use of aluminum containers in the food manufacturing industry. At the same time [i.e. simultaneous to the regulatory change], new production technology has reduced the cost of manufacturing aluminum containers.”

What is job analysis? Explain comprehensively the job analysis method.

What is the relationship between the price level and the level of output in the long run?

1. When the price level rises, output decreases.
2. The relationship depends on how quickly producers respond to changes in prices.
3. There is no relationship between the price level and the level of output.

In the short run, what happens to the level of output when the government increases its spending?

1. Aggregate demand shifts inward, decreasing the equilibrium level of output.
2. Aggregate demand shifts outward, increasing the equilibrium level of output.
3. Aggregate demand shifts inward, increasing the equilibrium level of output.

What is the long-run effect of increasing output beyond the full-employment level?

1. Prices and wages rise, and the level of output falls.
2. Prices and wages rise, and the level of output remains unchanged.
3. Prices, wages, and the level of output decrease.

Are men and women inherently different, or are they essentially the same, through society teaches us to be different from each other?

Suppose an economy is Initially in equilibrium at potential GDP, Y*. Then the government decreases the net tax​ rate (t).

1. Briefly explain in words (1-2 sentences without a diagram) What type of gap would be caused by this policy AND the impact​ on real GDP and the price level in the short-run.

2. Briefly explain in words (1-2 sentences with no diagram) how the economy adjusts back to the long​ run equilibrium if left alone and no further fiscal or monetary policy is used.

3. In going from the short run equilibrium to the long-run equilibrium, briefly explain (1 sentence) how the composition of real GDP may have changed.

4. Briefly explain what the difference in the growth rate of potential GDP might occur If instead of a decrease in the net tax​ rate, there was an increase in government purchases (1 sentence).

5. Briefly explain (1-2 sentences without a diagram) what the “Money Neutrality” argument implies about the effectiveness of discretionary fiscal policy and the impact on potential real GDP and price level in the long run.

When the USA experienced high inflation in the 1970s, Canada also experienced high inflation. Indeed, Canada was said to have “imported inflation” from the USA. If Canada’s exports to the USA were high, Canada’s foreign exchange reserves would have increased. Since exports create jobs, how could Canada have imported inflation from the USA?

1. Consider the money market. In conducting monetary policy the Bank of Canada arranges the purchase and sale of Government of Canada securities with the chartered banks.
   1. Show changes (with a + or – sign) to the assets and liabilities of the Bank of Canada and the Chartered Banks if the Bank of Canada sells $50 million in securities to the chartered banks.

2. Briefly explain in words (1-2 sentences and with no diagram) whether this is an example of expansionary or contractionary monetary policy AND how this sale of securities in a) will change the money supply and the equilibrium interest rate.

3. Briefly explain in words (1-2 sentences with no diagram) what type of short-run “gap” the sale of securities would be used to eliminate AND what the impact of this monetary policy would be on the equilibrium real GDP and the price level.

4. Assuming this is an open economy with international capital​ mobility, briefly explain (1-2 sentences with no diagram) the second part to the monetary transmission mechanism as a result of the monetary policy described in b) above.

5. Briefly explain (in 2 sentences with no diagram) the Keynesian and Monetarists debate about the effectiveness of monetary policy as a tool to stimulate growth and the assumptions about the demand for money curve and the investment demand curve held by each.

What is the difference between monetary and fiscal policy?

1. What is the relevance of the vent-for-surplus theory of international trade to the current development experience of low-income economies?

2. The market for air conditioners has: Total Cost: TC = 20 + 10Q +(3/4)Q2 Marginal Cost: MC = 10 + (3/2)Q Marginal Revenue: MR = 1,010 – 0.5Q Demand: Q = 4,040 – 4P

2a. If a monopoly controls the market, calculate the equilibrium price and quantity of air conditioners.

2b. Calculate the monopoly profits from part a.

2c. If the government imposed a tax of $80 per air conditioner that the monopoly sells, calculate the equilibrium new price and quantity of air conditioners and the government tax revenue.

2d. Calculate the monopoly profits from part c.

2e. Calculate the minimum tax that the government could charge to make the monopoly produce no output.

Human Resource professionals has certain set of skills, give at least five (5) essential human resource management skills needed to run a successful human resource department and explain how these skills are used. Provide an examples.

When unexpected inflation is zero, the corresponding unemployment rate is not zero because:

A) the output gap is negative.

B) the output gap is positive.

C) structural unemployment and frictional unemployment are not zero.

D) cyclical unemployment is high and positive.

If an economy has an output gap of 0%, this means the economy is:

A) suffering from hyperinflation.

B) at its highest sustainable rate of production.

C) experiencing cyclical unemployment.

D) unsustainable in the long run.

Excess demand leads to a:

A) surplus and rising prices.

B) shortage and rising prices.

C) surplus and falling prices.

D) shortage and falling prices.