Questions from Macroeconomics


Q: A company has an investment project that would cost $10 million

A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years. a. Should the firm undertake the project if the interest rate is 11 percent? 10 perc...

See Answer

Q: What benefit do people get from the market for insurance? What

What benefit do people get from the market for insurance? What two problems impede the insurance market from working perfectly?

See Answer

Q: Describe three ways that a risk-averse person might reduce the

Describe three ways that a risk-averse person might reduce the risk she faces.

See Answer

Q: Using the numbers in the preceding question, what is the size

Using the numbers in the preceding question, what is the size of Ectenia’s labor force? a. 50 b. 60 c. 70 d. 80

See Answer

Q: Explain whether each of the following events increases, decreases, or

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-force participation rate. a. After a long search, Jon finds a job. b. Tyrion...

See Answer

Q: Is unemployment typically short-term or long-term? Explain

Is unemployment typically short-term or long-term? Explain.

See Answer

Q: How would an increase in the world price of oil affect the

How would an increase in the world price of oil affect the amount of frictional unemployment? Is this unemployment undesirable? What public policies might affect the amount of unemployment caused by t...

See Answer

Q: Chloe takes $100 of currency from her wallet and deposits it

Chloe takes $100 of currency from her wallet and deposits it into her checking account. If the bank adds the entire $100 to reserves, the money supply ________, but if the bank lends out some of the $...

See Answer

Q: Beleaguered State Bank (BSB) holds $250 million in deposits

Beleaguered State Bank (BSB) holds $250 million in deposits and maintains a reserve ratio of 10 percent. a. Show a T-account for BSB. b. Now suppose that BSB’s largest depositor withdraws $10 million...

See Answer

Q: Explain whether each of the following events increases or decreases the money

Explain whether each of the following events increases or decreases the money supply. a. The Fed buys bonds in open-market operations. b. The Fed reduces the reserve requirement. c. The Fed increases...

See Answer