Questions from Managerial Economics

Q: The following table shows the inflation rate and output level for four

The following table shows the inflation rate and output level for four consecutive periods in a given economy. In period 1, the economy is at its long-run equilibrium (i.e., the inflation rate equals...

Q: Suppose one could measure the welfare gains derived from eliminating output (

Suppose one could measure the welfare gains derived from eliminating output (and unemployment) fluctuations in the economy. Assuming these gains are relatively small for the average individual, how do...

Q: The following panels describe two different short-run aggregate supply curves

The following panels describe two different short-run aggregate supply curves. In which situation is the case for non-activist policy stronger? Explain why.

Q: Assume that policy makers are using the Taylor rule as a basis

Assume that policy makers are using the Taylor rule as a basis for policy changes, as specified in Equation 1. Under each of the following scenarios, show how the real interest rate, output, and infla...

Q: The following table shows unemployment and inflation rates for Canada during the

The following table shows unemployment and inflation rates for Canada during the 1972–1982 period: a) Plot Canada’s unemployment rates during this period. On the...

Q: The Taylor rule suggests that the policy rate target should be increased

The Taylor rule suggests that the policy rate target should be increased when the output gap is positive. Do you think the Taylor rule encourages or discourages demand-pull inflation? Which might be a...

Q: Suppose a firm has a great idea: overnight shipping. This

Suppose a firm has a great idea: overnight shipping. This idea will decrease costs for many businesses and will therefore result in a more efficient economy. If the entrepreneurs who create this conce...

Q: Microcredit programs (i.e., very small loans issued to

Microcredit programs (i.e., very small loans issued to the extremely poor) usually target a group of women and assign funds to them under the condition that decisions about the use of funds are made b...

Q: The production function for technology in Equation 8 can be expressed as

The production function for technology in Equation 8 can be expressed as At+1 - At = χ At αt Nt. Assume that χ = 1, that both N and α can vary over time, and that N is interpreted as the labor force r...

Q: Suppose a given country encourages its citizens to save 20% of

Suppose a given country encourages its citizens to save 20% of their income and then allocates these funds through government owned financial intermediaries. As a result, many government officials get...