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Subject:EconomicsPrice: Bought3
1. Countries A and B each produce 2 goods, X and Y. Owing to better technology country A can produce more of both of these goods with a unit of labor than can country B. Does this mean that Country A should ignore the possibility of trading with country B? Explain why or why not. 2. Restaurants were closed for in person seating during the height of the COVID epidemic. Show graphically and explain how these closures affected the market for meal delivery services like Door Dash and Uber Eats. 3. Rank the 3 types of unemployment: cyclical unemployment, frictional unemployment and structural unemployment in terms of the harm that they do to the economy. Provide a complete explanation justifying your ranking. 4. Show graphically and explain how an increase in population affects long-run real wages and economic growth. 5. Show graphically and explain how an increase in household disposable income affects interest rates. 6. fully explain why the money market returns to an equilibrium interest rate when interest rates are below that equilibrium rate. 7. Using the AD/AS model, show graphically and explain how persistent efforts by the Fed to drive the economy above full employment affect the economy in both the short-run and in the long-run. 8. If you are a policy maker would you rather see the economy fall into a recession that results from a demand shock or a recession that results from a supply shock? Explain why.
