Category: Uncategorized

A country experiences hyperinflation — prices rise from 50% to 500% to 5,000% per year. Which costs of inflation ESCALATE MOST SEVERELY as inflation accelerates?

Country A has r=3% and pi=12%. Country B has r=3% and pi=2%. For a foreign investor to earn the SAME after-tax real return in both countries, what must be true about their tax rates?

Y = 5 times F(L,K,H,N). Observed: F(6,8,4,3) = 150. You scale all inputs by x=1.5 and observe F(9,12,6,4.5) = 210. Does CRS hold?

A bank: Assets = $100B; Deposits = $88B; Other debt = $8B; Capital = $4B. Asset values fall 6%. Is the bank solvent?

A student proposes: (1) Lower the reserve ratio from 15% to 5%; (2) Print money to fund government infrastructure (roads); (3) Subsidize university education. Evaluate each component’s effect on LONG-RUN price level and LONG-RUN real GDP per capita.

Which sequence CORRECTLY traces how a discount rate INCREASE ultimately affects nominal GDP?

A nation has L=200, K=400, H=100, N=50, A=2, and Y=960. The government admits 100 new immigrant workers (no additional K, H, or N). What happens to Y/L?

What is the key difference between the RECOGNITION lag, DECISION lag, and IMPLEMENTATION lag in fiscal policy? For each, identify which is longest for fiscal policy.

The Ricardian Equivalence theorem suggests that a tax cut financed by government borrowing has NO effect on AD because households, anticipating future tax increases to repay the debt, save the entire tax cut. If Ricardian Equivalence held perfectly, what would the tax multiplier equal?

The natural rate of unemployment u_N in the United States has been estimated to range from approximately 4% to 6% over the past several decades. Which of the following factors would LOWER u_N (shift the LRPC left)?