In 1960, Sraffa published his major work entitled "The Production of Commodities by Means of Commodities" and by this book he led to rethinking of political economy. Do you agree with this idea? Why? Why Not?

   Using the quantity theory of money, suppose that this year's money supply is $50 billion, nominal GDP is $1 trillion, and real GDP is $500 billion.

a.   What is the price level? What is the velocity of money?

b.   Suppose that velocity is constant and the economy's output of goods and services rises by 5 percent each year. What will happen to nominal GDP and the price level next year if the Bank of Canada keeps the money supply constant?

c.    What money supply should the Bank of Canada set next year if it wants to keep the price level stable?

d.   What money supply should the Bank of Canada set next year if it wants inflation of 10 percent? (5marks)

What are the basic contributions of Post Keynesians? Discuss the role of interest, money and investment in Keynes. Do you think, capitalism will need public policy in order to overcome the the effects of virus in economics? Why? Why not?

A firm sells a good that is perceived by consumers as a necessity. It also has few substitutes. This good is likely to have demand that is _______ and the price elasticity of demand (in absolute value) would be _______.
a. elastic, less than one
b. inelastic, greater than one
c. inelastic, less than one
d. elastic, greater than one

Assume there is a decrease in the price of a complement and a decrease in the price of a substitute in production. Which of the following statements is correct?
a. The equilibrium price will definitely decrease.
b. The equilibrium quantity will definitely increase.
c. The equilibrium quantity will definitely decrease.
d. The equilibrium price will definitely increase.

When both demand and supply change simultaneously, there will be some uncertainty in the results.
a. True
b. False

The sellers of a good have requested the government to stop the price from going below a certain amount. If the government grants the request, the price restriction will be a price ceiling.
a. True
b. False

Assume that a store has a 20% off sale that causes an increase in quantity demanded of 25%. The price elasticity of demand is _______ (in absolute value) and the demand for the good is _______.
a. 1.25, inelastic
b. 1.25, elastic
c. 0.80, elastic
d. 0.80, inelastic

Gross Domestic Product, as you have read, is generally among the most important measures of an economy's health, and by extension, a country's well-being of its citizens/residents. In this week's discussion, you may take the positions to assert, explain, and defend:

"GDP, given all its shortcomings (as described in the textbook), misses too many vital aspects of a society's well-being. Following is a list of other (more?) important considerations when assessing the well-being of a society's citizens/residents..."

1. The earthquake and the Fukushima nuclear disaster in Japan in 2011 may be illustrated by

A aggregate demand curve shifts rightward.

B. a rightward shift in LRAS and an upward shift in the AS curves

C. a leftward shift in LRAS and an upward shift in the AS curves

real wage rate falls.

2. Which of the following shifts the AS curve for the Turkish economy to the right? A.productivity increase of 3% in Turkish manufacturing industry, B.30% increase in the minimum wage, C. fall in world oil prices

A and B

C only

A only

A and C

A, B, and B

3. ________ increases the natural rate of output.

A. A recession

B. An increase in the amount of human capital

C. A decrease in the money wage rate

D. A recessionary gap

E. An increase in aggregate demand

4. Real GDP definitely increases if:

A. the AS curve shifts leftward and the AD curve does not shift.

B. both the AD curve and the AS curve shift rightward.

C. the AD curve shifts leftward and the AS curve shifts rightward.

D. both the AD curve and AS curve shift leftward.

E. potential GDP decreases so that real GDP exceeds potential GDP.

5. When a person’s income was $50 per month, the person spent $48. When the person’s income rises to $60 per month, the person’s spending rises to $55. The person’s marginal propensity to consume is:

A. 0.7

B. between 0.81 and 0.88.

C. 0.88

D. 0.845

E. 0.96 when income was $50/month, and 0.92 when income is $60/month.

6. The MPC is 0.90 . If government expenditures on goods and services increases by $2.0 billion, after the multiplier effect works out, aggregate expenditure increases by

A. $10 billion.

B. $20 billion.

C. $2.22 billion.

D. $1.8 billion.

E. $2.0 billion.

7. In the money market, if the quantity of money supplied exceeds the quantity of money demanded, the nominal interest rate will ________ and the prices of assets will ________.

A. rise; increase

B. fall; not change

C. rise; decrease

D. fall; decrease

E. fall; increase

8. In the short run, when the central bank increases the quantity of money, the

A. quantity demanded of money decreases.

B. nominal interest rate falls.

C. demand for money increases.

D. price level decreases.

E. demand for money decreases.

9. If the quantity of money supplied ________ the quantity demanded, in the long run the value of money ________.

A. exceeds; falls as people spend their surplus money

B. exceeds; rises as people buy bonds

C. is less than; falls as people spend their surplus money

D. is less than; does not change unless the Fed increases the money supply

equals; equals zero

Discuss the difference between the accountant's concept of profit and the economist's view of profit?

3. Profits or losses must be temporary for perfectly competitive firms. Why?

Assume that you are able to determine that the equilibrium price for a good will definitely decrease, and the equilibrium quantity will definitely increase. Which of the following MUST have occurred for you to be able to make these conclusions?
a. Demand decreased and supply decreased
b. Demand increased.
c. Demand decreased and supply increased.
d. Demand increased and supply decreased.
e. Supply increased.

When demand and supply both change in the same direction (for example, they both decrease), the change in the equilibrium quantity can be predicted with certainty.
a. True
b. False

Consider the market for wood flooring. The economic downturn has caused many firms selling wood flooring to go out of business. At the same time, consumers are expressing a preference for wood flooring over alternatives like carpet and tile. Based on this information, what would you expect to happen to the price of wood flooring?
a. The price will definitely stay the same.
b. More information is needed to answer this question.
c. The price will definitely decrease.
d. The price will definitely increase.

The result of a cross price elasticity calculation between goods A and B is –2.4. From this you can conclude that A and B are substitutes.
a. True
b. False

The income elasticity of demand for laptops is 0.8. From this information you can conclude that laptops are normal goods.
a. True
b. False

Assume that you are told that because of some changes, the equilibrium price increased but it is unknown if the equilibrium quantity increased, remained the same, or decreased. Which of the following would be consistent with this outcome?
a. There was a decrease in input costs and consumers expected lower income.
b. Consumers expected a lower price and firms expected a higher price.
c. There was a decrease in income (the good is inferior) and a decrease in the number of firms.
d. There was a positive change in consumer tastes and an increase in productivity.

When demand is _______ consumers are _______ to price changes and the price elasticity of demand is _______.
a. elastic, relatively sensitive, greater than one (in absolute value)
b. inelastic, completely insensitive, equal to one (in absolute value)
c. inelastic, relatively sensitive, less than one (in absolute value)
d. unit elastic, hyper-sensitive, equal to zero
e. perfectly elastic, hyper-sensitive, equal to one (in absolute value)

The price elasticity of demand for sandwiches at a deli is estimated to be 1.75 (in absolute value). This means that the demand for the sandwiches is _______ and for any given percentage change in price (in absolute value), the percentage change in quantity demanded will be _______ (in absolute value).
a. elastic, smaller
b. elastic, larger
c. inelastic, smaller
d. inelastic, larger

If demand is inelastic, a change in the selling price causes no change in the quantity demanded.
a. True
b. False

Which of the following is not correct about a price ceiling?
The amount of the good or service bought and sold under a price ceiling is less than the equilibrium quantity.
a. A price ceiling creates a persistent surplus.
b. Price ceilings cause underinvestment in the industry.
c. For it to be effective, a price ceiling is imposed below the equilibrium price.
d. Black markets often develop when a price ceiling is in place.

How would a country monetize its asset or its equity? Explain and Explore.

1a. Distinguish a change in the quantity demanded of any factor of production (labor, capital, land, entrepreneur) from a change in demand for and factor of production.

1b. Distinguish a change in the quantity supplied of any factor of production (labor, capital, land, entrepreneur) from a change in supply of and factor of production.

1c. Which one of them gives the best and clearest explanation of a change in demand as opposed to a change in quantity demanded?

1d. Why is the demand for a factor of production called derived demand? Explain with a brief example.

Describe the difference between discounting and interest, referring to the way we have talked about it in class.
Specifically use this example: A company is looking to purchase an item worth 10k today. The same item can be purchased 3 years later for 10k. Why is the second option more desirable, and how much more desirable is it if your cost of capital is 5%?