1. Describe the differences between value delivery network and value chain. Explain how each are critical to successful marketing planning.

Discuss the financial issues surrounding building a new college football stadium based on Maxcy and Larson's "Reversal of Fortune or Glaring Misallocation: Is a New Football Stadium Worth the Cost to a University?"

Assume that U.S. can produce two goods, compact discs and apples. Compact discs are produced using capital and labor. Apples are produced using land and labor. The total supply of labor is 20 workers. Given the supply of capital, the marginal products of labors are as follows:

Suppose that the price of a compact disc is $2 and the price of apples is $1

The equilibrium allocation of labor between the compact disc sector (L_CD) and the apple sector (L_A) is respectively

B)

Suppose that the price of a compact disc is $2 and the price of apples is $1

The equilibrium wage rate (w) is

1. This question is based on the article, “The COVID-19 Fiscal Multiplier: Lessons from the Great Recession,” by Daniel J. Wilson, published on May 26, 2020, by the Federal Reserve Bank of San Francisco as part of its Economic Letters series. The article tries to assess the potential economic impact of the fiscal response to the COVID-19 pandemic. It draws parallels between the fiscal responses to the current downturn and to the Great Recession of 2008-2009 to estimate the potential range of the current fiscal multiplier and, thus, assess the extent of economic recovery in the coming quarters.

1. According to the article, how do the sizes of the fiscal responses to the current downturn and to the Great Recession compare in terms of dollar value and as percent of GDP? [8]

Answer:

2. According to the article, which component of the recent stimulus package had no counterpart in the 2008-2009 stimulus package? If that component is set aside, how does the composition of the rest of the fiscal response to COVID-19 compare with the composition of the fiscal response to the Great Recession? [8]

Answer:

3. The article mentions that the fiscal multiplier rises as the marginal propensity to consume (MPC) increases. Why does a rise in MPC increase the fiscal multiplier? [8]

Answer:

4. According to the article, why is the MPC higher for “liquidity-constrained” households compared to those that have liquid assets or can easily borrow when needed? [7]

Answer:

5. According to the article, the 2020 fiscal stimulus package amounts to about 11% of the 2019 US GDP. Given the article’s conclusion about the range of the fiscal multiplier under current conditions, how much the US GDP is expected to rise in the next couple of years as a result of the fiscal stimulus? [8]

Answer:

6. The 2020 fiscal stimulus package and the Fed’s actions that have used highly expansionary conventional and unconventional monetary policy tools have raised the prospects of the US economy and have helped the US stock market to recover quite strongly. They have prevented many other asset prices from falling. Would the impacts of the fiscal and monetary stimulus policies on asset prices help or hinder economic recovery in the US this year? [7]

Answer:

Extra Points Question: The article points out that the fiscal multiplier is found to be higher when the interest rate is at the zero lower bound (ZLB) compared to the situation when it is above zero and is not kept constant by monetary policy. What factors may explain the higher fiscal multiplier at the ZLB? Please use the IS-LM model to make a case for your answer

Does a free good mean any good I get for free? What if I was fishing with a hand-made fishing net and caught a fish. Is that considered a free good? I didn't have to pay for it and I didn't use anything that I had bought. The Native Americans used to find all their food and water and didn't pay for it. Were they free? What makes a good "free" in economics? Can you think of a good that is not scarce? If no, why?

According to the Solow model, in the steady state, both output per worker Y/L and the capital stock per worker K/L grow at the rate of technological progress, and (choose one or both)

A this is confirmed by U.S. data for the past half century—about 2 percent per year

B this means that the capital-output ratio has remained approximately constant over time

Technological progress also affects factor prices, and in the steady state, (choose two)

A the real wage is constant over time

B the real wage grows at the rate of technological progress

C the real rental price of capital is constant over time

D the real rental price of capital grows at the rate of technological progress

The economies of the world exhibit

A conditional convergence

B unconditional convergence

International differences in income per person can be attributed to (choose one or more)

A differences in the quantities of physical and human capital

B differences in the efficiency with which economies use their factors of production

The Solow model

A does not explain technological progress but, instead, takes it as exogenously given

B seeks to explain technological progress and therefore treats it as an endogenous variable

To incorporate technological progress, we write the production function as

Y = F(K, L x E), where (choose one or more)

A E is the efficiency of labor

B L x E is the effective number of workers

C g is the rate of labor-augmenting technological progress

D n is the rate of growth of the labor force

E the effective number of workers L x E is growing at the rate n + g

Most technological progress has been

A labor augmenting

B labor saving

Identify those statements that are TRUE. (Choose one or more)

A The steady-state level of capital per effective worker, k, is where break-even investment, (δ + n + g)k is equal to investment sf(k)

B According to the Solow model, only technological progress can explain sustained growth and persistently rising living standards.

C The steady-state consumption per effective worker is c* = f(k*) – (δ + n + g)k*.

D Steady-state consumption is maximized if MPK = δ + n + g

E Steady-state consumption is maximized if MPK – δ = n + g

Describe the essential features of a model economy in a monetary market of rational people for which each of the following statements is true: (These features might include the pattern of population growth, monetary growth, endowments, and government policies. Note that there may be more than one model that yields the given results.)

a. The gross rate of return on fiat money is 1. The monetary equilibrium does not maximize the utility of the future generations.

b. The price level doubles from period to period. The monetary equilibrium also maximizes the utility of the future generations.

c. The gross rate of return on fiat money is 1. The monetary equilibrium also maximize the utility of the future generations.

Describe the balance of payments and what it seeks to measure. Describe the three accounts included and what these measure. Explain how an understanding of the balance of payments helps to have a more complete of exchange that takes between nations rather than focusing on the balance of goods and services. Discuss the relationship between the current account and savings, investment, and government finances. Is the current account in itself the best measure of unsustainable trade imbalances? Explain why or why not.

1. Fiat money

Select one:

a. can be exchanged for gold and silver.

b. is found in gold certificates .

c. is not acceptable in the U.S.

d. is accepted on faith.

2. Core inflation excludes price changes in food and energy because these price chang-es

Select one:

a. may not be related to a trend in the economy's overall price level.

b. may be related to trend factors in the economy's overall price level.

c. are not volatile.

d. show a constant inflation rate.

3. Which of the following is seen as a benefit to society in moving away from using checks to electronic banking?

Select one:

a. processing checks is a capital-intensive process

b. electronic banking is a labor-intensive process

c. processing checks is less costly than electronic banking

d. electronic banking is a more efficient process than check clearing

4. What agency processes most of the electronic payments?

Select one:

a. the Treasury

b. the Congress

c. the FDIC

d. the Fed

5. Disinflation

Select one:

a. is the same thing as deflation.

b. is a slowdown in the rate of inflation.

c. is a persistent decline in the level of prices.

d. is usually considered a bad thing.

6. To combat unemployment the government should use fiscal and monetary policies to

Select one:

a. run a deficit and increase the money supply.

b. run a deficit and decrease the money supply.

c. run a surplus and increase the money supply.

d. run a surplus and decrease the money supply.

7. Government demand-management policies that are used to try to increase the equi-librium level of output in the economy are known as

Select one:

a. expansionary policies.

b. fiscal dividends.

c. output policies.

d. laissez-faire policies.

8. Although prices in the United States and France may be stable, changes in the ex-change rate between dollars and euros can make the actual cost of trade more expensive for one or the other.

Select one:

a. true

b. false

International Economics

Discuss why free trade agreements (FTA) are growing so fast nowadays. How does the Covid-19 pandemic affect FTA implementation? State your arguments and opinions to support the facts. The length of your work should be at least 3 Microsoft Word pages with Times New Roman font size 12, spacing 1.5.

A monopolist faces the demand curve P =11 Q,
where P is measured in dollars per unit and Q in thousands of units. The monopolist has a constant average cost of $6 per unit.
Answer the following questions, showing all workings.
a) Calculate the monopolists profit-maximizing price and quantity. Calculate the
monopolists profit.

b) Draw the average and marginal revenue curves and the average and
marginal cost curves for the monopolist including the area of profits (label the diagram accurately showing prices and quantity, along with all curves for full marks).

c) A government regulatory agency sets a price ceiling of $7 per unit.
Calculate what quantity will be produced and explain why it will be produced at that quantity.

d) Using the new price ceiling and your quantity produced figures from
part c), calculate the new profit for the monopolist.