<p>ccer, lol I didn’t get that one either. An explanation would be really helpful</p>
<p>@motion:
Depends on the elasticity. If it’s inelastic, the consumers bear most of the tax, if it is elastic, then the sellers do.</p>
<p>in the 2009 free response question 3</p>
<p><a href=“Supporting Students from Day One to Exam Day – AP Central | College Board”>Supporting Students from Day One to Exam Day – AP Central | College Board;
<p>assuming a RRR of 20%, how will antonio’s deposit of $100 affect:</p>
<p>a. the maximum dollar amount of money the bank that accept’s antonio’s deposit can lend? </p>
<p>80</p>
<p>b. the maximum total change in demand deposits?</p>
<p>500 or 400? the banking system could gain 400 beyond the initial 100 dollar deposit, so which is it?</p>
<p>c. the maximum change in money supply?</p>
<p>does the money supply change? The money that one bank gains in the form of a deposit will have to be extracted from another bank’s reserves, resulting in a net gain of $0. Also, loans are essentially lines of credit (e.g. IOUs) so does the money supply really change?</p>
<p>Or am I being confused again?</p>
<p>antonio.</p>
<p>ai. is 80.
aii is 500. 400+100
aiii. is 400. </p>
<p>Essentially, if you get ii correct. you should get iii correct.
The order of questions should be aiii then aii lol.</p>
<p>b is 25 mil.
c. real wages will increase in the short run.</p>
<p>@ccesssu
@motion1234</p>
<p>i don’t know how the frq works, but the right answer is that the profit maximizing output does not change in the long run for the firm. since this is a per-unit tax, MC does shift…so shouldn’t the output change?</p>
<p>Could someone explain to me how an increase in price level (or higher inflation) leads to a decreased interest rate?</p>
<p>Is there a series of graphs that relate the two?</p>
<p>
Real wages will fall in the short run. The purchase of bonds/increase in money supply will cause prices to go up (inflation) whereas wages remain the same (sticky wages).</p>
<p>^I thought what Jersey thought. Thanks for confusing me :(. And, what are demand deposits? </p>
<p>Also, @cc - that’s for when supply is elastic/inelastic right (I know the opposite is true for demand or whatever the case is). Also, how do you actually calculate how much of the tax each specific party bears?</p>
<p>Can someone also explain to me why it matters whether or not a currency has a fixed, flexible, or managed exchange rate?</p>
<p>i have a copy of the 1995,2005 multiple choice for micro, as well as the 1995,2000 multiple choice for macro. i also have the 2008 collegeboard practice tests for micro/macro, and ill send em to ppl to practice with if some1 can answer sagert’s questions sufficiently on the other 2010 micro thread around here(i am wonderin the answers to those questions too)</p>
<p>^^ Real wages decrease</p>
<p>Can you send me those tests in a PM? Also, link me to the other thread and I’ll see if I can figure out the problems.</p>
<p>Why does a bigger government deficit increase interest rate? I thought the more a government spends, the more money there is in the economy so interest rates would go down. But, my review book says the increase deficit increases interest rates. PLEASE EXPLAIN!!! (yeah i posted a seperate thread for this, sorry)</p>
<p>its the thread started by sagert w/ 2010 micro in its name. not thread-hijackin, but just wonderin wat those answers r which will benefit all of us^^</p>
<p>@jersey
woops haha, I was thinking decrease, but I accidentally wrote increase because everything else in the question was increasing</p>
<p>You guys seem to have covered the answers to those questions quite extensively in the thread.</p>
<p>Would you mind sending me the non-1995 macro and micro tests? It would be greatly appreciated…</p>
<p>Can someone answer my questions :(?</p>
<p>
Real interest rates are determined by the supply/demand for loanable funds. Bigger government deficit = increased government borrowing which increases the demand for loanable funds thus increasing interest rates.</p>
<p>So wait, let’s say the Fed enacts an expansionary monetary policy and money supply shifts right and thus interest rates are lowered and thus investment increases. Let’s say that the government then enacts expansionary fiscal policy at the same and thus interest rates increase. Is the change in interest rates indeterminate?</p>
<p>^ Yes, you are correct.</p>
<p>motion, theres still other q’s i nid answered.</p>
<p>thx for ur help so far genre.</p>
<p>And again:</p>
<p>How do you actually calculate how much of the tax each specific party bears?</p>
<p>Can someone also explain to me why it matters whether not a currency has a fixed, flexible, or managed exchange rate?</p>
<p>Hey Guys—I just took the 1995 AP Microeconomics exam and got a 52/60…that is like a solid 5…I was just wondering if the exams have gotten harder since then bc that was pretty straight forward in my opinion…</p>