Questions from Macroeconomics

Q: Use the neoclassical model of investment to explain the impact of each

Use the neoclassical model of investment to explain the impact of each of the following on the rental price of capital, the cost of capital, and investment. a. Anti-inflationary monetary policy raises...

Q: In the neoclassical model of business fixed investment, under what conditions

In the neoclassical model of business fixed investment, under what conditions will firms find it profitable to add to their capital stock?

Q: In the 1970s in the United States, the inflation rate and

In the 1970s in the United States, the inflation rate and the natural rate of unemployment both rose. Let’s use this model of time inconsistency to examine this phenomenon. Assume that policy is discr...

Q: Use the neoclassical theory of distribution to predict the impact on the

Use the neoclassical theory of distribution to predict the impact on the real wage and the real rental price of capital of each of the following events: a. A wave of immigration increases the labor fo...

Q: Suppose that the tradeoff between unemployment and inflation is determined by the

Suppose that the tradeoff between unemployment and inflation is determined by the Phillips curve: u = un - a(π - Eπ), where u denotes the unemployment rate, un the natural rate, p the rate of inflatio...

Q: What are the inside lag and the outside lag? Which has

What are the inside lag and the outside lag? Which has the longer inside lag—monetary or fiscal policy? Which has the longer outside lag? Why?

Q: On April 1, 1996, Taco Bell, the fast-

On April 1, 1996, Taco Bell, the fast-food chain, ran a full-page ad in the New York Times with this news: “In an effort to help the national debt, Taco Bell is pleased to announce that we have agreed...

Q: What was unusual about U.S. fiscal policy from 1980

What was unusual about U.S. fiscal policy from 1980 to 1995?

Q: In each of the following cases, identify whether the problem is

In each of the following cases, identify whether the problem is adverse selection or moral hazard, and explain your answer. How might the problem be dealt with? a. Rick has gotten a large advance to w...

Q: Explain the difference between debt finance and equity finance.

Explain the difference between debt finance and equity finance.