In 1984 and​ 1985, the small South American country of Bolivia experienced hyperinflation.

Do the money​ supply, price​ level, and exchange rate against the U.S. dollar move broadly as economic theory would​predict?

A. ​No, the three variables did not move in rigid lockstep as one would expect.

B. Yes, these three variables clearly moved in​ step, just as the theory would predict.

C. Not​ exactly, since the exchange rate went up while inflation the money supply also increased.

D. Bolivian data is too unreliable to assess in any meaningful way.

Between April 1984 and July​ 1985, the percent change in the general price level was approximately ____ %.

Between April 1984 and July​ 1985, the percent change in the price of the dollar was approximately ____ %.

How do these rates of increase compare to each​ other, and to the percent increase in the money​ supply?

A. All three rates of increase were very disparate.

B. Both increased at similar​ rates, and more slowly than the money supply.

C. Both increased at similar​ rates, and more rapidly than the money supply.

D. None of the above.

Can you explain the results regarding the percentage changes in these three​ variables? (Hint: Refer to the definition of the velocity of​ money.)

A. The results are consistent with an increase in the real demand for​ money, an effect that is correlated with exploding​ inflation, just as Bolivia experienced.

B. The results are consistent with a decline in the real demand for​ money, an effect that is correlated with exploding​ inflation, just as Bolivia experienced.

C. The results are unexplainable since the Bolivian experience was unprecedented.

D. The results are consistent with an increase in the real demand for​ money, which likely happened in Bolivia due to the surge in prices.

The Bolivian government introduced a dramatic stabilization plan near the end of August 1985. Looking at the price levels and exchange rates for the following two​ months, do you think it was​ successful?

A. Two months is an insufficient length of time to formulate an assessment.

B. ​No, the price level remained ridiculously high and the peso was still almost worthless relative to the dollar.

C. Yes, since both the price level and the exchange rate began to level off in the two months after August.

In light of your​ answer, explain why the money supply increased by a large amount between September and October 1985.

A. Seasonal factors such as fall harvesting explain the increase.

B. The increase was only large in absolute terms. In percentage​ terms, it was the second smallest​ month-over-month increase for 1985.

C. October was the start of a new Bolivian fiscal year.

D. The increase was probably a policy error by the Bolivian central bank.

Describe the North Korean conflict.

The following relates to the Lerner Index.

Which of the following statements is (are) true?

The inverse demand curve for a monopolist changes from

A) P = 75– 5 Q to
B) P = 50 – 5 Q

while the marginal cost of production remains unchanged at a constant $20. After the change in the demand curve, the price changes from _____ to _____ and the output changes from _____ to _____.

A monopolist that produces a computer software program packages has an inverse demand curve of P=150-5 Q and a marginal cost of 5 Q where P is the price per program package and Q is the number of software program package.

The firm earns a producer surplus that is ____ dollars higher as a monopolist versus if it were in a perfectly competitive market.

Suppose that two players are playing the following game. Player 1 can choose either Top or Bottom, and Player 2 can choose either Left or Right. The payoffs are given in the following table:

player 2:

left right  

player 1 : Top: (1,2) (2,4)

bottom: (3,4) (0,3)

where the number on the left is the payoff to Player 1, and the number on the right is the payoff to Player 2.

A) (2 points) Does Player 1 have a dominant strategy, and if so what is it?

B) (2 points) Does Player 2 have a dominant strategy and if so what is it?

C) (1 point each) For each of the following strategy combinations, write TRUE if it is a Nash Equilibrium, and FALSE if it is not:

• i) Top/Left
• ii) Top/Right
• iii) Bottom/Left
• iv) Bottom Right

D) (2 points) What is Player 1’s maximin strategy?

E) (2 points) What is Player 2’s maximin strategy?

F) (2 points) If the game were played with Player 1 moving first and Player 2 moving second, using the backward induction method we went over in class, what strategy will each player choose?

Q.9.1 Explain the various steps involved in the Box‐Jenkins methodology for forecasting.

Q.9.2 Which step do you think is the most significant? Why?

Q.9.3 What are the differences and or similarities between Box–Jenkins and VAR approaches to

economic forecasting?

What do you think is the most equitable and fair way to deal with the issue of subsidies and the global market for cotton?

What are the impacts of different forms of elasticity of demand on the consumer and producer surplus?

What is tax incidence? How does it relate to price elasticity of supply/demand? How might understanding tax incidence be important when evaluating public policy proposals?

Apply the "three-legged stool" method of moral reasoning to the problem of the UNC Athletics scandal. What went wrong? Does the method of moral reasoning work? What are the key considerations here? Why could each of the three systems have a problem coming to the right answer if viewed individually? Does this problem go away if viewed collectively? (hint: think about the definitions under what circumstances will the "three-legged stool" method fail?)

Q5. In a panel data modelling scenario, what are fixed effects? Discuss (show in equation form) three ways that you could use to estimate a Fixed effects

model and discuss the suitability of each method

4.) What is tax incidence? How does it relate to price elasticity of supply/demand? How might understanding tax incidence be important when evaluating public policy proposals?

Discuss two formal tests for cointegration and why they are considered superior to the Engle

and Granger method.