1) Identify and explain using evidence from the lesson ONE reason that economists use theories and models.

2) Why is the Circular Flow Model a good model to start with in economics?

1. Unemployment (show all work)

Suppose that country a population of 120 made up of a labour force of 100 and 20 children under the age of 15,

1. What is the participation rate.

Eight members of the labour force are unemployed

2. What is the unemployment rate?

Of the eight unemployed 2 worked in a factory that produced pies this factor has closed down and expected to open up after the pandemic.

3. Describe what type of unemployment this is and why.

One of the eight is a sky instructor and has been laid off for the summer

4. Describe what type of unemployment this is and why.

Make as per Canadian standards. 10 marks. thanks.

One of the unemployed cannot find a job and gives up looking

5. What is the new unemployment rate

Imagine that at the same time GDP improves in the US, the European Central Bank (ECB) undertakes another round of quantitative easing, effectively increasing the foreign money supply. What would happen then to the expected foreign return? And to the current equilibrium exchange rate (E(t))? Please provide a short explanation and a graph.

5. MATCHING

Match the terms on the right to the ones on the left by placing the appropriate CAPITAL letter on the space provided. All the phrases are designed to fit; some may fit more than once. In any case, provide only one answer for each term. Illegible answers will be marked as wrong.

1. _____ easy money policy                                A.       increases competition

2. _____   M2+                                                      B.       imports become cheaper

3. _____ C $ depreciates                                     C.       expansionary fiscal policy

4. _____ reduction in Gov. spending                  D.       reduces competition

5. _____ non-tariff barrier                                  E.       used to reduce inflationary pressures

6. _____ C $ appreciates                                     F.       includes notice deposits of banks

7. _____ free trade                                              G.       tight fiscal policy

8. _____ tax reduction                                         H.       Exports become cheaper

9. _____   M 1                                                       I.       interest rates fall

10. ____ tight money policy                                  J.       currency plus demand deposits in banks

4. Economic Growth

Using 2017 as a base year, calculate;

1) The GDP deflator

2) Nominal Economic growth

3) Real economic growth

4) Give reasons why Real GDP per capita may overstate the well-being of a countries inhabitants?

make as per Canadian standards.

1) Explain the 4 ways the Federal Reserve would increase the money Supply and explain and graph how this would impact interest rates, consumption, investment, AD, GDP, Prices and Unemployment. (Make sure to include both the money and the goods graph).

1. How does our current Real GDP reflect the current state of the economy? (the latest GDP report)
2. What is happening to consumption, investment, government spending, and net exports according to the report?
3. According to the latest data and your own evaluation of the economy, where would you say we are in the business cycle and why?
4. Also, choose one of the other reports in U.S. Economy at a Glance (Links to an external site.) and briefly summarize the data from that report.

Question 1

Banks such as Merrill Lynch took part in the accounting fraud by :

Designing and implementing "arbitrage" opportunities for Enron in Texas.

Purchasing debt laden power barges in Nigeria and then selling them back to Enron.

Taking power plants offline to create artificial shortages of power in Washington.

All of these

Question 2

The collapse of Enron was made worse for employees because

Enron executives encouraged employees to invest all their 401K's in Enron stock.

Much of their compensation was in Enron stock.

When the company collapse was imminent the executives sold their stock while preventing employees from being able to sell theirs so they lost everything.

All of these

Question 3

The only Wall Street analyst who did not recommend Enron stock was

promoted for being the only one to give the right prediction.

a whistle blower who made Enron's fraud public.

bribed into changing his recommendation for $3 million in Enron stock.

fired by his employer when Enron threatened to cut off business ties with them.

Question 4

Which of the following is the only business to make money for Enron?

Indian power plants.

California electricity trading.

A trading market in weather.

Video on demand through Blockbuster.

Question 5

The executive whose division lost 1 billion dollars while he racked up $250 million in compensation thereby quitting the company to marry a stripper.

Ken Lay

Andy Fastow

Jeff Skilling

Lou Pai

Countries A and B are small open economies. Their economies depend on each other heavily for trade, but their respective governments don't always work together when setting economic policy. Assume (for simplicity) that these countries only trade with each other. Country A decides to decrease domestic taxes to balance its budget. a) How does Country A's policy, assuming they have a floating exchange rate, immediately impact trade between the two countries? Explain your answer with graphs and two sentences. b) Now assume Country B pegs their currency (fixed exchange rate) to Country A's currency. How should Country B's central bank respond to Country A's policy to control short run output? How does Country B’s new policy impact trade relative to before Country A changed their tax policy? Explain your answer with graphs and two sentences. c) Suppose Country A’s central bank contracted money supply to combat inflation simultaneously with their new tax policy (explained before part (a)). With this new information. Would your answer in part (b) change for Country B’s optimal central bank policy to fix their exchange rate? Explain your logic.

The interviewer shares, the fact is that some people will work hard to earn a lot of money while others will be content with much less income, what does this indicate to you?

Explain the logic of the monetary neutrality and why changes in the quantity of money only affect nominal variables and not real variables. Do you agree that monetary neutrality approximates the behavior of the economy in the long run? Why or why not?

must be at least 250 words

How does the Federal Open Market Committee increase the money supply? Why might the Federal Open Market Committee choose to increase the money supply?

MUST BE AT LEAST 250 WORDS

Jamie runs an Android app business. She has production function f(x1,x2) =

x₁^1/3 x₂^1/4. The price of factor 1 is w1 = 2, the price of factor 2 is w2 = 3, and the price of the output is 12.

1. Does this production function exhibit increasing, decreasing, or constant return to scale?

2. Write out the short-run profit maximization problem with x̄₂ = 81.

3. Solve the short-run profit maximization problem by showing all the important

   steps.

4. Find the short-run production level that maximizes the profit.

5. Write out the long-run profit maximization problem.

6. Solve the long-run profit maximization problem.