1. “The depreciation of the dollar from February 2009 to February 2014 had a positive effect on aggregate demand in the United States.” Is this statement true, false, or uncertain? Explain your answer.
2. Why are central banks so concerned with inflation expectations? Draw a graph that illustrates your answer in the short-run.
3. Suppose the public believes that a newly announced anti-inflation program will work and so lowers its expectation of future inflation. What will happen to aggregate output and the inflation rate in the short run? Draw a graph to illustrate your answer.
4. What happens to inflation and output in the short run and long run when government spending increases? Draw two graphs to illustrate your answer, one for the short run and one for the long run.

2. Suppose you are the manager of a California winery. How would you expect the following events to affect the price you receive for a bottle of wine? Explain your answers.

a. The price of a comparable French wine decreases.

b. One hundred new wineries open in California,

c. The unemployment rate in the United States decreases.

d. The price of cheese increases.

e. The price of a glass bottle increases significantly due to new government antishatter regulations.

f. Researchers discover a new wine-making technology that reduces production costs.

g. The price of wine vinegar, which is madde from the leftover grape mash, increases.

h. The average age of consumers increases, and older people drink less wine.

According to the New York Times (11/18/06) the number of car producers in China is increasing rapidly. The newspaper reports that “China has more car brands now than the United States.” But while car sales have climbed 38% in the first three quarters of the year, automakers have increased their output even faster, causing fierce competition and a slow erosion of prices.” At the same time, Chinese consumer incomes have risen. Assume that cars are a normal good. Use a diagram of the supply and demand curves from cars in China to show what is happening. Explain verbally, too. Label and describe shifts and directions of Q and P carefully.

Explain in 2 Paragraphs mininum. include diagram.

Assume you own a company that produces mountain bikes. Your company has manufactured mountain bikes locally in the United States for over 30 years. Because low cost competition is increasingly gaining market share and your company costs are relatively high, you are considering outsourcing production to China.

A. Describe how differential analysis can be used to assist in making this type of make-or-buy decision. Include specific examples related to producing mountain bikes in your response.

B. What additional factors would you consider outside of the financial information analyzed with differential analysis? These are called qualitative factors in the text. Be sure to state why you would consider the qualitative factors included in your response.

5. World Trade In a Global Crisis – (20 pts.) Answer in one paragraph.

a) During this pandemic, does the law of comparative advantage still apply to trade?

b) During this crisis, what has happened to the value of the US dollar on world markets? What are the advantages and disadvantages of this in terms of the trade deficit and foreign travel?  Describe how you would show this trend on a foreign exchange graph.

c) Prior to the pandemic, the US and China were involved in a trade war. In an effort to reduce its trade deficit, the United States decided to slap tariffs on imported steel. Prior to the tariff, Chinese imported steel sold for less than the US domestic price.   Who wins and who loses because of the tariff?

7.5 The U.S. Bureau of Labor Statistics released hourly wage figures for various countries for workers in the manufacturing sector. The hourly wage was $30.67 for Switzerland, $20.20 for Japan, and $23.82 for the U.S. Assume that in all three countries, the standard deviation of hourly labor rates is $3.00.

a. Suppose 37 manufacturing workers are selected randomly from across Switzerland and asked what their hourly wage is. What is the probability that the sample average will be between $30.00 and $31.00?

b. Suppose 35 manufacturing workers are selected randomly from across Japan. What is the probability that the sample average will exceed $21.00?

c. Suppose 48 manufacturing workers are selected randomly from across the United States. What is the probability that the sample average will be less than $22.85?

The U.S. Bureau of Labor Statistics released hourly wage figures for various countries for workers in the manufacturing sector. The hourly wage was $30.67 for Switzerland, $20.20 for Japan, and $23.82 for the U.S. Assume that in all three countries, the standard deviation of hourly labor rates is $4.00.

a. Suppose 42 manufacturing workers are selected randomly from across Switzerland and asked what their hourly wage is. What is the probability that the sample average will be between $30.00 and $31.00?
b. Suppose 34 manufacturing workers are selected randomly from across Japan. What is the probability that the sample average will exceed $21.00?
c. Suppose 49 manufacturing workers are selected randomly from across the United States. What is the probability that the sample average will be less than $22.75?

Length of Stay ~ Health insurers and federal government are both putting pressure on hospitals to shorten the average length of stay (LOS) of their patients. The average LOS for women is 4.5774 days according to Statistical Abstract of the United States: 2005.

A first study conducted on a random sample of 18 hospitals in Michigan had a mean LOS for women of 3.8911 days and a standard deviation of 1.2279 days.

A medical researcher wants to determine if the mean LOS for women in Michigan is less than 4.5774 days. The null and alternative hypothesis are given by

H0: μ = 4.5774 u< 2.5774

Note: Numbers are randomized for each instance of this question. Use the numbers given above.

What is the estimated effect size dˆ? Give your answer to 4 decimal places.