I’m gonna say that Household income allows people to buy goods, which in turn needs more money to hold their wealth, this means that their money depriciates and that the value of the dollar goes down.</p>
Yes, that was complete BS. I had the crappiest teacher, and I cannot self-study past the basic concepts 
Which maybe could of encompassed this.</p>
Another question! Does Full employment imply 100% employment of the work force, even if there’s a 4 or 5% natural rate of unemployment?</p>
Haha, does that mean that one was wrong xD</p>
No it doesn’t, it is healthy for an economy to have some sort of unemployment as it can represent technological change which would need new workers, people moving and allocating their skills better, and it could just be the result of an economy scaling down to combat inflation.</p>
I know what natural rate of unemployment means. I was asking if when the Free Response says “Full Employment” does that mean that it is within the natural rate of unemployment, or does the FRQ mean its at 100% employment.</p>
It means it’s at the natural rate, I believe… because it’s possible to be producing beyond full employment.</p>
Anyone wanna pm me some offers for trade? I need macro tests. I have some tests that you might be interested in.</p>
Do you have any Macro tests? I have the 95, 00, 05, and 08 Audit exams for Macro.</p>
For macro, can we talk about what monetary and fiscal policy do and what the differences between each are?</p>
I have no macro. Only 2 micro tests. I just took the 2000 Micro and got 51/60… not sure if it was a fluke or what, since I usually get 30-40 on the 5 to a 5 tests. Is the real test simply not as hard?</p>
Also, Contractionary Fiscal Policy = lower government spending or increased taxes in order to decrease Aggregate demand, or to go to the left form inflationary gap toward full employment. It’s monetary policy is their attempt to lower the supply of money by way of increasing the discount rate, buying bonds/treasuries</p>
Expansionary is essentially the opposite, trying to get out of recession.</p>
Someone please double check my explanation?</p>
IF in a Recession expansionary policy is employed
Monetary Policy- Buy Bonds, Decrease Ratio Rate, Decrease Discount rate (increase money supply to lower interest rate to encourage investing)
Fiscal Policy- Lower Taxes, Increase Spending, Increase Transfer payments (increase aggregate demand)</p>
IF in a boom, contractionary policy is employed
Monetary- Sell Bonds, increase Ratio Rate, increase discount rate (tighten control on mney, raise interest rates, encourage less spending)
Fiscal- Tax Hikes, Less gov spending, less transfer payments (decrease Aggregate Demand)</p>
I always get this confused… can banks or only the Fed buy/sell treasuries?</p>
@TenebrousNight fiscal policy is government spending and taxing. Increase in gov’t spending/decrease in taxes increases AD and vice versa. Monetary policy is controlled by the Federal Reserve by open-market operations (which deals with bonds), changing the discount rate, and changing the required reserve ratio (RRR). If you buy bonds, lower the discount rate, and lower the RRR you’re increasing the money supply which in turn decreases the nominal interest rate which means businesses will invest more which means that AD will increase. </p>
The natural rate of unemployment is 4-6% (or simply 5%) because there’s always structural and frictional unemployment. </p>
Can somebody give an example of going from the loanable funds market to the money market and vice versa?
Also, what do we need to know about credit/capital accounts?</p>
Can anyone explain this one to me?</p>
In a perfectly competetive industry, the market price of the product is $12. A firm rpoduces at a level of output where average total cost is $16, MC is $16, and AVC is $8. To max its profit, the firm should</p>
a. Decrease its selling price
B increase its selling price
C decrease output but keep producing
D shut down
E leave both price and output unchanged.</p>
thanks.</p>
Lol *** is this omgggggggg</p>
and @Theundertaken…isn’t it B</p>
^it’s C, 10char</p>
Yea, it’s C. Perfectly competitive firms can’t change their selling price because they’re price takers. Because they’re producing where MC is greater than MR they should produce less until MC = $12 as well.</p>
oh yeah huh</p>
im screwed</p>
Is macro generally easier than micro?</p>
Also, can someone explain this to me:</p>
A perfectly competitive firm, earning economic profits, produces and sells 100 units of output at a price of $20 per unit. If it’s marginal cost of increasing output to a rate of 101 units is $18, which of the following statements is correct.
A) The total revenue from selling 101 units is the same as the total revenue from selling 100 units.
(B) The total profit from selling 101 units is $2 greater than the total profit from selling 100 units.
(C) The total cost of producing 101 units is $2 greater than the total cost of producing 100 units
(D) To sell 101 units, the firm must reduce its price below $20.
(E) To sell 101 units, the firm must raise its price above $20.</p>
The answer is B?</p>
LETS TRY THIS AGAIN . . .</p>
the answer is C</p>