How do expectations influence the markets for loanable funds and financial markets? What is the difference between the efficient-market hypothesis and the random walk theory?

Fixed exchange rates and monetary policy

Consider a group of open economies with perfect capital mobility among them.

a) Assume that there is a Leader country. All other countries (referred to as the Follower countries) fix their exchange rates to the Leader country. Discuss the effectiveness of monetary policy in the Follower countries.

(b) If the Leader country reduces its money supply to fight inflation, what must the Follower countries do to enforce their fixed exchange rates? What is the effect on their economies? What would happen if the Follower countries did nothing?

1. Along a given demand curve, a decrease in supply will typically

   a		decrease price, but the change in quantity could be in either direction
   b		increase price and decrease the quantity
   c		decrease price but leave quantity unchanged
   d		decrease both quantity and price
   e		increase both quantity and price

2 Stagflation refers to

3. Which of the following would be included in this year's GDP?

Five years ago, the U.S. Supreme Court chose to hear a case in which a man was arrested by the Secret Service in 2006 for going up to then-Vice President Cheney and telling him that he was wrong about his decision to go into Iraq. The man sued the Secret Service for arresting him, saying that the First Amendment protects his right to criticize the government. The Court decided whether he had a First Amendment right to sue. In another case last year, a woman sued Wal-Mart for firing her for protesting the Iraq policies of then-President Bush. However, in that case, no court would hear the case (it was dismissed by all courts in which it was filed), and the woman did not get her job back. By so doing, those courts effectively upheld Wal-Mart’s right to fire the woman. Why would a federal court (i.e., the Supreme Court) elect to hear the Cheney case but no federal court would hear the Wal-Mart case?

• A. The Cheney case arguments were better made than the Wal-Mart case, otherwise, the Wal-Mart case would have been heard by the courts.

• B. The First Amendment only protects speech when that speech is threatened by the government, not when it’s threatened by private individuals or corporations.

• C. Cases that involve government officials get precedence over cases that involve private businesses.

• D. The Wal-Mart case looked to the courts more like a dispute between the woman and her employers than a First Amendment case. But, in principle, the courts would have heard the case otherwise.

1 Markets and government regulations are both needed to provide healthcare goods and services effciently and effectively. Do you agree. Justify your answer.

2 Give an example of a healthcare circumstance in which both public and private regulation are present. Which serves the consumers better and why?

3 Assuming you are the manager of a company, how could you use behavioral economics to increase the number of insured employees in your firm?

modelling Production Functions-

Q=2L-.01L^2+3K-.02K^2

L=55 K=55

compare this to L=50 K=50

Calculate output elasticity (% changeQ)/(%change inputs)what does it tell you about returns to scale for this firm and why?

Based on an analysis of his tweets and other public statements and actions, apply Hare’s Psychopathology Checklist to Donald J. Trump. Which of the twenty characteristics apply to him? To what extent do these personality traits account for his ascent in business and politics?

Suppose that an Irish Sweepstakes winner deposits $10 million in cash into her transactions account at the Bank of America. Assume a reserve requirement of 25 percent and no excess reserves in the banking system prior to this deposit. Show the changes on the Bank of America balance sheet when the $10 million is initially deposited.

1.Which of the following would not be included in an economist's definition of investment spending?

2. A decrease in the demand for peanut butter could be caused by a(n)

3. Which of the following would indicate the beginnings of an expansion of the economy?

4. To determine the CPI, you would need to know the

An increase in supply means that:

a.the supply curve has shifted leftward.

b.there is an upward movement along the supply curve.

c.producers are willing to sell more at each price.

d.there is a downward movement along the supply curve.

An increase in the equilibrium price and quantity in a market occurs when there is a:

a.rightward shift of the demand curve, given an upward-sloping supply curve.

b.leftward shift of the demand curve, given an upward-sloping supply curve.

c.rightward shift of the supply curve, given a downward-sloping demand curve.

d.leftward shift of the supply curve, given a downward-sloping demand curve

A decrease in the equilibrium price and an increase in the equilibrium quantity occurs when there is a:

a.rightward shift of the demand curve, given an upward-sloping supply curve.

b.leftward shift of the demand curve, given an upward-sloping supply curve.

c.rightward shift of the supply curve, given a downward-sloping demand curve.

d.leftward shift of the supply curve, given a downward-sloping demand curve.

Suppose the demand for and the supply of a good increases simultaneously. Which of the following is likely to be true in this case?

a.The equilibrium price increases, unequivocally.

b.The equilibrium price decreases, unequivocally.

c.The equilibrium quantity increases, unequivocally.

d.The equilibrium quantity decreases, unequivocally.

Janine is considering buying a water filter and a reusable water bottle rather than buying bottled water. Will doing so save her money?

First, determine what information you need to answer this question, then click here to display that info (along with other info).

• How much water does Janine drink in a day? She normally drinks 3 bottles a day, each 16.9 ounces.
• How much does a bottle of water cost? She buys 24-packs of 16.9 ounce bottles for $2.99.
• How much does a reusable water bottle cost? About $10.
• How long does a reusable water bottle last? Basically forever (or until you lose it).
• How much does a water filter cost? How much water will they filter?
  • A faucet-mounted filter costs about $28 and includes one filter cartridge. Refill filters cost about $33 for a 3-pack. The box says each filter will filter up to 100 gallons (378 liters)
  • A water filter pitcher costs about $22 and includes one filter cartridge. Refill filters cost about $20 for a 4-pack. The box says each filter lasts for 40 gallons or 4 months
  • An under-sink filter costs $130 and includes one filter cartridge. Refill filters cost about $60 each. The filter lasts for 500 gallons.

Which option is cheapest over one year (365 days)?

The cheapest option saves her $ over a year.

Give your answer to the nearest cent. Pro-rate the costs of additional filters (so if you only use part of a filter, only count the corresponding fraction of the filter cost).

San Francisco voters rejected proposition E years ago. Read the proposition (see Moodle for Prop E summary) and answer the following questions.

a) Describe Proposition E?

b) List some of the arguments in favor of Proposition E. Do you agree with them?

c) List some of the arguments against Proposition E. Do you agree with them?

d) How will Proposition E affect the soda market? What will happen to the quantity of soda bought and sold? What will happen to the price of soda? Who will ultimately pay this tax?

e) Would you vote for a soda tax?

) Market imperfections can raise the cost of insurance above the actuarially fair price. Explain three frictions that may arise between the firm and its insurer.

(b) Suppose you are the manager of an insurance company. Describe three ways in which you can reduce the above-mentioned frictions.