Define the following terms and explain their importance to the study of economics.
a. public good

b. externality

c. irreversible decision

d. moral hazard

e. rent seeking

Variables typically included in a multivariate supply function (other than the price and quantity of the item the supply function represents) are prices of other goods that use similar input resources for production, expectations, the number of suppliers, techniques of production, taxes and subsidies, and prices of input resources, weather. Please answer the following questions about the affect changes in other variables might have on the supply of the item. These changes will either cause supply to increase (shift right) or decrease (shift left). Use either word as applicable, for the short answer.

1. It is rumored that refiners are taxed 5.4 cents/gallon more than they are taxed for gas mixed with Ethanol. The tax is used to subsidize the growth of more corn (from which Ethanol is made). The result is an ____________ in the supply of Ethanol.

2. E-book readers can now be bought for about $100. Digital books are considerably cheaper than printed versions.   Predictably then the supply of e-books will _____________.

3. T. Boone Pickens spent millions of his own money advertising the benefits of “Cleaner American- Produced Natural Gas” as an alternative vehicle fuel. Advertising seeks to increase the demand for an item. Suppose instead he had spent his millions to help service stations install natural gas fueling equipment (pumps ??). This would be an effort to _____________ the supply of readily available natural gas fueling facilities

4. Think of highways as a resource used in the production of highway transportation. Thus building more and better highways is likely to _______________ the supply of vehicles using them.

5. A problem getting the public to buy automobiles equipped to use both gasoline and natural gas as fuel is the cost of adding natural gas capability to the vehicles. Suppose a small amount of tax was added to the cost of a gallon of gas (maybe one cent, for example). This could be used to encourage manufacturers to install natural gas using capability in vehicles, thus ______________ the supply of these vehicles on the road.

Explain the implications of a 5% VAT removal and excise tax on petroleum products along the following lines

i. horizontal equity

ii. vertical equity

iii. Efficiency

1. What are large-scale asset purchases (LSAPs), also sometimes called quantitative easing?
2. What is the purpose of LSAPs?
3. Explain the effects of LSAPs on housing prices and interest rates?
4. How does the Federal Reserve pay for LSAPs?

1. According to the growth accounting studies, if you lived in a country where illiteracy was high and 40% of the children left school early and did not complete their education what would probably be the results for that country?

Select one: a. Average income in the country will see significant increases. b. There would be both a human and economic loss. c. The economic status of the country would continue to rise. d. More technological breakthroughs would happen in this country.

2. According to growth accounting studies,

a country would achieve better results by promoting Select one: a. exports b. research. c. research and education. d. Education.

3.

An economy is considered to be in a recession if

Select one:

a. real GDP has increased for two consecutive quarters.

b. it is moving from one peak of the business cycle to the next.

c. it is moving from the peak toward the trough of the business cycle.

d. it is moving from the trough to the peak of the business cycle.

After getting her degree in Economics, Jeanine went to work for the Bureau of Labor Statistics. She compiles data on the unemployment rate, which serves as an economic indicator. What does this data help Jeanine to understand?

Select one:

a. How to design surveys to collect the information to calculate the unemployment rate.

b. Whether or not the banking industry is going to require federal assistance.

c. How well the economy is doing at a macro level.

d. How many new employees the Bureau of Labor Statistics should hire this year.

Can something like Brexit happen in France or Germany? Why would that be less likely?

Suppose you are the manager of a restaurant that serves an average of 400 meals per day at an average price per meal of $20. On the basis of a survey, you have determined that reducing the price of an average meal to $18 would increase the quantity demanded to 450 per day.

1. Compute the price elasticity of demand between these two points.
   
2. Would you expect total revenues to rise or fall? Explain.
   
3. Suppose you have reduced the average price of a meal to $18 and are considering a further reduction to $16. Another survey shows that the quantity demanded of meals will increase from 450 to 500 per day. Compute the price elasticity of demand between these two points.
   
4. Would you expect total revenue to rise or fall as a result of this second price reduction? Explain.
   
5. Compute total revenue at the three meal prices. Do these totals confirm your answers in (b) and (d) above?

What is the equivalent worth at the end of period 4 of 4 uniform per period amounts of 600 starting at the end of period 1 followed after that ends by 7 uniform period amounts of 800 using an interest rate of 7.00%.

Question one
For this question, refer to the Bank of Ghana’s Monetary Policy Committee Press Release of March 18, 2020.
a) In ordinary language, explain the meaning of monetary policy. What is the difference between monetary policy and fiscal policy?
b) Explain the difference between monetary loosening and monetary tightening.
c) According to the statement, the MPC reduced the monetary policy rate by 150 basis points. Does this constitute a monetary loosening or monetary tightening? Explain
d) When deciding whether to tighten or loosen monetary policy, central banks weigh the relative risks to price stability and growth. Mention two indicators that the MPC use to gauge the risk to inflation and two indicators the MPC use to gauge the risk to growth.
e) Based on the information in the Press Release, in the thinking of the MPC did the risk to growth outweighed the risk to inflation or vice versa? Refer to specific points from the press release to back up your argument.
f) Using the money market diagram, explain the effect of this policy measure on the real interest rate and real money holdings.
  
g) In ordinary language, explain how the reduction in the Monetary Policy Rate will help the relative risk identified in part (e) above.
h) In addition to the reduction in MPR, the MPC also reduced the Primary reserve requirement from 10% to 8%. Explain how this

Check each of the following that may exist in oligopolies and monopolistic competition when compared to pure competition.

A.increased efficiency

B. higher costs

C. less efficiency

D.more output than pure competition

E. lower output than pure competition

F.lower costs to consumers

1. Given the PPP relationship between real exchange rates, nominal exchange rates, and relative inflation rates, which of the following would we expect to occur due to an increase in foreign prices, given fixed nominal exchange rates.
2. 1. Real appreciation, if home prices don’t change, meaning home goods are more competitive
   2. Real depreciation, if home prices don’t change, meaning home goods are more competitive
   3. Real appreciation, if home prices don’t change meaning home goods are less competitive
   4. B and C

2. Suppose the spot dollar-euro exchange rate is $1.10/€, and the 60-day forward rate is $1.14/€.
   1. The dollar is selling at a forward discount
   2. The Euro is selling at a forward discount
   3. The Euro is selling at a forward premium
   4. The dollar is selling at a forward premium
   5. A and C
   6. B and D

3. Increasing unit labor cost (dollar value of labor it takes to produce a unit) implies
   1. Increased competitiveness
   2. Reduced competitiveness
   3. A real exchange rate depreciation
   4. A nominal exchange rate appreciation
   5. None of the above

4. A policy trilemma relating to exchange rates refers to
   1. One cannot have fixed exchange rates, independent monetary policy and open capital markets
   2. One cannot have flexible exchange rates, independent monetary policy and open capital markets
   3. One cannot have fixed exchange rates, independent monetary policy and capital controls
   4. One cannot have an appreciating currency, independent monetary policy and capital controls
   5. None of the above
5. Big Mac costs $3.50 in the United States and 7.80 zlotys in Poland. If the exchange rate is 3 zlotys per dollar, purchasing power parity predicts that
   1. the dollar is undervalued, and will appreciate
   2. the dollar is overvalued, and will depreciate
   3. the zloty is overvalued, and will depreciate
   4. the currencies are correctly valued

6. PPP referring to the theory that exchange rates reflect the differences in price levels may not hold because of,
   1. Transportation costs
   2. Differences between tradable and non-tradable products
   3. Differences in inflation rates
   4. Differences in interest rates
   5. A and B
   6. All of the above

7. A growing current account deficit may be caused in the short run by_____ and in the long run by __________.
   1. Change in the exchange rate; change in competitiveness
   2. Change in the business cycle; change in FDI
   3. Change in exchange rates; change in the savings-investment imbalance
   4. All of the above
   5. None of the above

8. The Mexican financial crisis of 1994 was characterized by _______ versus the Asian crisis which was characterized by _________________
   1. Sovereign debt; contagion
   2. Large current account deficit; poor real estate loans and contagion between countries
   3. Hyperinflation; Large current account deficit
   4. None of the above

9. The J-curve refers to
   1. The phenomenon that real depreciation can first cause a current account to worsen and then to improve over time.
   2. The phenomenon that real depreciation can first cause a current account to improve and then to worsen over time.
   3. The phenomenon that interest rate increases first cause a current account to worsen and then to improve over time.
   4. The phenomenon that interest rate increases first cause a current account to improve and then to improve over time.

10. When a country takes this currency regime it will back up its domestic money supply with foreign reserves
    1. Fixed peg
    2. Crawling band
    3. Currency board
    4. Flexible exchange rate
    5. None of the above

Due to Covid – 19 Pandemic that caused economics crisis, Bank of Canada had cut interest rates; and it is likely to announce further cuts even if interest rates went into negative territory;

If we assume that, because of the actions of Bank of Canada, the economy is fully recovered to the extent that it developed an inflationary gap.

1. After this recovery that developed an inflationary gap, is Bank of Canada going to increase or decrease the interest rates?

2. Based on your answer to (a) above, and with the aid of an appropriate labeled diagram, show the effect on the money supply.

3. With your understanding of the monetary transmission mechanism and assuming an open economy, explain how the Central Bank of Canada’s actions affect the various components of Aggregate Demand, and, ultimately the equilibrium price level and real GDP?  Use the appropriate labeled diagrams to help explain your answers.

Consider the effect of a proportional tax on hours worked using diagrams to illustrate your answers. Assume consumers are endowed with a certain number of hours of leisure time each week that they can sell to the market in the form of work, decompose the overall effect of the tax into income and substitution effects.

in 300 words Do you think that private prisons are a good idea or should all prisons be run by the government? Explain why.