Question 1: Elaborate with an example that how commercial banks create money under fractional-reserve banking. Elaborate the tools used by Central bank of a country to increase and decrease the money supply.

Question 2: Based on the material of the chapter “ money growth and inflation” of your text book explain how inflation starts in an economy? Why multinational companies feel unsafe to invest in those countries that have high inflation rate? Write your answer the light of your text book materials.

Question 3: In the light of Purchasing-Power Parity theory explain how inflation rate a county affects its nominal exchange rate?

Question 4: Explain why and how net exports and net capital flow are related to each other. Does trade deficit necessarily create trouble for a county’s economic growth? Discuss.

Use IS-LM diagram to show the impact of the pandemic on the Canadian economy

How do barriers to entry allow a monopolist to earn economic profits in the short run and the long run? Why does the elimination principle eliminate economic profits in the long run for a purely competitive firm but doesn't do so for a monopolistic firm?

The student will write a 2-3 page review of a scholarly article on the global marketing mix or identifying alternatives strategies for entering foreign markets and tactical skills needed to craft PR and advocacy campaigns in different regions of the world. Reviews should include a synopsis and your opinion of the article. The submission is to be double spaced using a 12 point font and will be graded based on depth and clarity. You need to include both the name and author of the article. This assignment is due on 04/30/2020 in class.

Consider the following two-player game:

(a) Find all pure strategy Nash equilibria of this game.

(b) Consider the following procedure of iterated elimination of weakly dominated actions : all weakly dominated actions of each player are eliminated at each stage. What are the action profiles that survive this procedure in the above game?

I have no problem with solving (a) but (b) is so difficult. This is a question From Osborne's An introduction to game theory. Excercise 391.1. Even though there's a solution available at Chegg, I can't follow the explanation.

Why does the assumption in the Contested Exchange lead to results that contradict the basic labour market model.

Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $30 million per year and a variable cost of $6 per bag no matter how many bags are produced.

Instructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places.

a. If this firm kept on increasing its output level, would ATC per bag ever increase?

  (Click to select)   Yes   No

     Is this a decreasing-cost industry?

       (Click to select)   Yes   No

b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge?

___ per bags

     At that price, what would be the size of the firm’s profit or loss?

At that price, the firm's ___ equals ___ million

     Would the firm want to exit the industry?

       (Click to select)   Yes   No

c. You find out that if you set the price at $7 per bag, consumers will demand 30 million bags. How big will the firm’s profit or loss be at that price?

Answer: ___

d. If consumers instead demanded 40 million bags at a price of $7 per bag, how big would the firm’s profit or loss be?

At that price, the firm's ___ equals ___ million

e. Suppose that demand is perfectly inelastic at 40 million bags, so that consumers demand 40 million bags no matter what the price is. What price should you charge if you want the firm to earn only a fair rate of return? Assume as always that TC includes a normal profit.

Answer: ___ per bag

Answer the following questions based on the Video: We the Economy: “Amazing Animated Film on the Debt and the Deficit and “The Fiscal Ship” computer game.

1) List your main three goals in “The Fiscal Ship”.

2) For each of your goals, list two policies you used to achieve these goals. Explain how your goals and policies affected the government budget and the debt.  

Remember that your choices have real life ramifications. Please do not enact policies and create a country that you are not willing to live in just to balance the budget. We all have to live here.

Suppose that the demand for bananas is given by: Qd(p) = 1,500,000 – 50000p where Qd(p) is quantity demanded in kilograms of bananas and p is the price. Further suppose that there are many identical sellers in the domestic market who can each choose to plant bananas. If a seller chooses to produce bananas, she will incur a planting cost of $2.00 per kilogram at the beginning of the year and must pay an additional $0.50 per kilogram to harvest the bananas at the end of the year at the optimal farm scale of 12,500 kg of bananas. You may assume that the planting cost includes the opportunity costs associated with the allocated land. Thus, at the 2 beginning of the year (when both planting and harvesting costs are part of total opportunity cost), the total amount of bananas planted is given by: Qs(p) = { 0 if p < 2.50 [0, ∞] if p = 2.50 ∞ if p > 2.50 } Note that supply can be drawn as a straight horizontal line at a price of $2.50 Draw the supply and demand system and clearly mark the equilibrium outcome. Shade in the area that is the consumer surplus

Two firms compete by choosing price. Their demand functions are

Q_1=20-P_1+P_2 and Q_2=20+P_1-P_2

where P_1 and P_2 are the prices charged by each firm, respectively, and Q_1 and Q_2 are the resulting demands. Note that the demand for each good depends only on the difference in prices; if the two firms collude and set the same price, they could make that price as high as they wanted, and earn infinite profits. Marginal costs are zero.

a. Suppose the two firms set their prices at the same time. Find the resulting Nash equilibrium. What price will each firm charge, how much will it sell, and what will its profit be? (Hint: Maximize the profit of each firm with respect to its price.)

b. Suppose Firm 1 sets its price first and then Firm 2 sets its price. What price will each firm charge, how much will it sell, and what will its profit be?

c. Suppose you are one of these firms and that there are three ways you could play the game: (i) Both firms set price at the same time; (ii) You set price first; or (iii) Your competitor sets price first. If you could choose among these options, which would you prefer? Explain why.

Suppose that country A and country B both produce wine and cheese. Country A has 800 units of available labor, while country B has 600 units. Prior to trade, country A consumes 40 pounds of cheese and 8 bottles of wine, and country B consumes 30 pounds of cheese and 10 bottles of wine.

Country A Country B  

Labor per pound cheese 10 10

Labor per bottle wine 50 30

a. Which country has a comparative advantage in the production of each good? Explain.

b. Determine the production possibilities curve for each country, both graphically and algebraically. (Label the pretrade production point PT and the post-trade point P.)

c. Given that 36 pounds of cheese and 9 bottles of wine are traded, label the post-trade consumption point C.

d. Prove that both countries have gained from trade. e. What is the slope of the price line at which trade occurs?

Given last month’s March employment report (released Friday April 3), what is your expectation for GDP in the 2nd quarter of 2020 and inflation

Two used car dealerships compete side by side on a main road. The first, Harry’s Cars, always sells high-quality cars that it carefully inspects and, if necessary, services. On average, it costs Harry’s $8000 to buy and service each car that it sells. The second dealership, Lew’s Motors, always sells lower-quality cars. On average, it costs Lew’s only $5000 for each car that it sells. If consumers knew the quality of the used cars they were buying, they would pay $10,000 on average for Harry’s cars and only $7000 on average for Lew’s cars.

Without more information, consumers do not know the quality of each dealership’s cars. In this case, they would figure that they have a 50-50 chance of ending up with a high-quality car and are thus willing to pay $8500 for a car. Harry has an idea: He will offer a bumper-to-bumper warranty for all cars that he sells. He knows that a warranty lasting Y years will cost $500Y on average, and he also knows that if Lew tries to offer the same warranty, it will cost Lew $1000Y on average.

a. Suppose Harry offers a one-year warranty on all of the cars he sells. i. What is Lew’s profit if he does not offer a one-year warranty? If he does offer a one-year warranty? ii. What is Harry’s profit if Lew does not offer a one-year warranty? If he does offer a one-year warranty? iii. Will Lew’s match Harry’s one-year warranty? iv. Is it a good idea for Harry to offer a one-year warranty?

b. What if Harry offers a two-year warranty? Will this offer generate a credible signal of quality? What about a three-year warranty?

c. If you were advising Harry, how long a warranty would you urge him to offer? Explain why.

As 90% of the US population is under some form of shut- or lock-down, the economic consequences have been devastating: 10 million unemployment claims in two weeks, expectation of a Q2 GDP decrease of over 25%, etc. The same is true in other countries with very few exceptions. While big business will probably recover, the impact on small businesses is both uncertain and possibly permanent – a study in the UK estimates that a six month shutdown would result in one third of small businesses closing permanently...

Using a real life example of a business you know well, how is it affected by the crisis and how it plans to survive in the future. You should try to incorporate any pertinent financial topics (such as: fundraising, the Fed, monetary and/or fiscal policy, bank lending, etc.) and include graphs, tables, charts to aid in your explanation.