Questions from Macroeconomics

Q: Suppose a woman marries her butler. After they are married,

Suppose a woman marries her butler. After they are married, her husband continues to wait on her as before, and she continues to support him as before (but as a husband rather than as an employee). Ho...

Q: What does the consumer price index measure? List three ways in

What does the consumer price index measure? List three ways in which it differs from the GDP deflator.

Q: If a 10 percent increase in both capital and labor causes output

If a 10 percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is said to exhibit decreasing returns to scale. If it causes output to inc...

Q: What is the role of constant returns to scale in the distribution

What is the role of constant returns to scale in the distribution of income?

Q: An economy has a monetary base of 1,000 $1

An economy has a monetary base of 1,000 $1 bills. Calculate the money supply in scenarios (a)–(d) and then answer part (e). a. All money is held as currency. b. All money is held as demand deposits. B...

Q: What are open-market operations, and how do they influence

What are open-market operations, and how do they influence the money supply?

Q: An economy has the following money demand function: (M/

An economy has the following money demand function: (M/P)d = .2Y/i ½. a. Derive an expression for the velocity of money. What does velocity depend on? Explain why this dependency may occur. b. Calcula...

Q: Who pays the inflation tax?

Who pays the inflation tax?

Q: The country of Leverett is a small open economy. Suddenly,

The country of Leverett is a small open economy. Suddenly, a change in world fashions makes the exports of Leverett unpopular. a. What happens in Leverett to saving, investment, net exports, the inter...

Q: Describe some of the trade-offs faced by each of the

Describe some of the trade-offs faced by each of the following: a. a family deciding whether to buy a new car b. a member of Congress deciding how much to spend on national parks c. a company presiden...