Explain the role of fiscal policy during a recession. Give two examples and illustrate them with graphs.

15)The theory of international trade presented in Chapter 9 of the Mankiw text, shows that a tariff can reduce efficiency by reducing domestic consumption, but increase efficiency by increasing domestic production.

True

False

16)

Table 5-1

Refer to Table 5-1. Good Y is

an inferior good.

not related to income.

a normal good.

price inelastic.

22) all points on the production possibility frontier:

will lead to overproduction and eventually a recession.

have both full and efficient employment of all resources, including labor

are fair and equitable

have all workers with jobs, but they may be employed in the wrong job

27) In Chapter 2 of his text, N.G. Mankiw states that nearly all economists agree that a ceiling on rents reduces the quality and quantity of housing available.

True

False

39)

Table 7-1

Refer to Table 7-1. If the table represents the willingness to pay of four buyers and the price of the product is $18, then their total consumer surplus is

$72.

$46.

$42.

$38.

the highly customized approach to offering products and services that match the need of a particular customer is called

explain three factors that affect changes in political behavior and culture and give examples

How will oil production in Saudi Arabia, affect competition for the Stanley Cup in 2015-2016?

Please use the economics knowledge you have learned so far to analyze the case below. You can propose your own questions and then answer them. Remember, there is no absolutely correct answer to this exercise. Its purpose is to provide you an opportunity to demonstrate your ability to think like an economist by applying economic principles to interpret the logic of a real-world phenomenon.

Economic Growth and the Business Cycle at Corning, Inc.

In 1851, Amory Houghton founded the company that became Corning, Inc. By 2015, Corning had more than 34,000 employees and sales of nearly $10 billion. Corning’s experience has mirrored two key macroeconomic facts: In the long run, the U.S. economy has experienced economic growth, and in

the short run, the economy has experienced a series of business cycles. During the 2001 recession, Corning suffered a $5 billion loss as the market for fiber-optic cable collapsed. Similarly, the recession of 2007–2009 caused a sharp decline in durable goods, which caused Corning’s sales of ceramics for automobile emissions systems and display panels for computers and televisions to decline. Despite these setbacks, Corning continued to make a profit during the recession due to sales of new products, such as Gorilla glass. A similar product, Willow glass, can be wound and shipped in rolls, which might make it possible for Apple and other firms to produce foldable electronic devices.

A machine costs $17,026 and is expected to have a scrap value of $2,432 whenever it is retired. Operating and Maintenance costs are $1,268 for the first year and expected to increase by $1,784 thereafter. If the MARR is 11%, determine the minimum equivalent uniform annual cost associated with the optimal economic life of the machine. The service life of this machine is 5 years.

One of Matt's favourite brands is offering a deal on its’ hooded jackets, which is sold at $100 a piece. The promotion claims that you can “get the second piece 50% off.” It means, if Matt buys a jacket for $100, he can buy the second jacket (of different colour) for 50% of the original tag price, $50. In addition, if Matt wants a third jacket, he has to pay $100 again, but now he has the privilege to purchase the fourth jacket for $50, etc. Assume the price for Other goods is $50 and Matt has an income of $1,000 to spend on both the jackets and Other goods.”

Draw Matt's budget constraint with jackets on the horizontal axis.

An industrial sewing machine costs $5,641 and is expected to have a scrap value of $3,792 whenever it is retired. Operating and Maintenance costs are $1,038 for the first year and expected to increase by $2,612 thereafter. If the MARR is 11%, determine the minimum equivalent uniform annual cost associated with the optimal economic life of the machine. The service life of this machine is 5 years.

What are the factors that affect the effectiveness of monetary and fiscal policy?

1. Suppose the Bank of Canada made an announcement that it would purchase up to $500 billion of long term Canada bonds over the following six month. What effect might this policy has on the yield curve? Explain in detail.

2. During the current economic crisis caused by the Coronavirus, what would you expect the yiedd curve to look like? Upward sloping, flat, or inverted.Explain in detail.