Consider a competitive market of an exhaustible resource – kryptonite. The
market demand is given by Q =1000 −100P . The marginal cost of production
is constant at $5 per ounce. It is expected by the market that kryptonite will sell
for $10 per ounce in 10 years. Also assume that the real interest rate is 5% (i.e.
the present discounted value of $1 received in 10 years is 0.614). What is the
current market price and output? (6%)
Changes in economic policies will frequently have an impact on the
unemployment rate. Explain whether each of the policy changes described is
likely to: (i) affect frictional or structural unemployment; and (ii) increase or
decrease the measured unemployment rate.
(1) The government raises the minimum wage. (5%)
(2) The government increases spending on job-training programs. (5%)
(1) Graphically illustrate the impact of an open-market purchase by the Federal
Reserve on the equilibrium interest rate using the theory of liquidity
preference and the market for real money balances. Be sure to label: (i) the
axes; (ii) the curves; (iii) the initial equilibrium values; (iv) the direction the
curve shifts; and (v) the terminal equilibrium values. (5%)
(2) Explain in words what happens to the equilibrium interest rate as a result of
the open-market purchase. (5%)
(3) As an economy moves into a recession, income falls, Illustrate graphically
the impact of a decrease in income on the equilibrium interest rate using the
theory of liquidity preference and the market for real money balances. Be
sure to label: (i) the axes; (ii) the curves; (iii) the initial equilibrium values;
(iv) the direction the curve shifts; and (V) the terminal equilibrium values.
(5%)
(4) Explain in words what happens to the equilibrium interest rate as a result of
the fall in income. (5%)
What is the impact on current consumption of a temporary tax cut according to:
(1) the Keynesian consumption function? (5%)
(2) the permanent-income hypothesis? (5%)
Use the Baumol-Tobin model to explain how each of the following events
would change the demand for money:
(1) The rate of inflation increases and is expected to continue to increase. (5%)
(2) Most households begin to practice a "don’t buy anything new" approach to
shopping. (5%)
可觀看題目詳解,並提供模擬測驗!(免費會員無法觀看研究所試題解答)