Questions from Macroeconomics

Q: Write a Cobb–Douglas production function for which capital earns one

Write a Cobb–Douglas production function for which capital earns one-fourth of total income.

Q: In the nation of Wiknam, people hold $1,000

In the nation of Wiknam, people hold $1,000 of currency and $4,000 of demand deposits in the only bank, Wikbank. The reserve–deposit ratio is 0.25. a. What are the money supply, the monetary base, and...

Q: Explain how banks create money.

Explain how banks create money.

Q: Suppose that the money demand function takes the form (M/

Suppose that the money demand function takes the form (M/P)d 5 L(i, Y ) 5 Y/(5i) a. If output grows at rate g and the nominal interest rate is constant, at what rate will the demand for real balances...

Q: If inflation rises from 6 to 8 percent, what happens to

If inflation rises from 6 to 8 percent, what happens to real and nominal interest rates according to the Fisher effect?

Q: Answer the following questions about your own experience in the labor force

Answer the following questions about your own experience in the labor force. a. When you or one of your friends is looking for a part-time job, how many weeks does it typically take? After you find a...

Q: What will happen to the trade balance and the real exchange rate

What will happen to the trade balance and the real exchange rate of a small open economy when government purchases increase, such as during a war? Does your answer depend on whether this is a local wa...

Q: If a small open economy bans the import of Japanese video game

If a small open economy bans the import of Japanese video game systems, what happens to saving, investment, the trade balance, the interest rate, and the exchange rate?

Q: Suppose that Congress passes legislation making it more difficult for firms to

Suppose that Congress passes legislation making it more difficult for firms to fire workers. (An example is a law requiring severance pay for fired workers.) If this legislation reduces the rate of jo...

Q: Is most unemployment long-term or short term? Explain your

Is most unemployment long-term or short term? Explain your answer.