The Montgomerys are opening up a smoothie shop. Mr. Montgomery is giving up his real estate position making $150,000 a year and Mrs. Montgomery did not work outside of the home prior to the opening of the smoothie shop. The Montgomerys are renting a building in a strip mall for $17,000 per year. They anticipate spending an average of $20,000 on ingredients and appliances each year, and they anticipate revenue of $300,000 a year once they are established. Calculate the Montgomerys' annual economic profit.

Assume that the following conditions exist: a. all banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. the money multiplier is 5 .     c. the planned investment schedule is such that at a 4 percent rate of interest, investment =$1450 billion. at 5 percent, investment is $1420 billion. d. the investment multiplier is 3 . e.. the initial equilibrium level of real gdp is $12 trillion. f. the equilibrium rate of interest is 4 percent now the fed engages in contractionary monetary policy. it sells $1 billion worth of bonds, which reduces the money supply, which in turn raises the market rate of interest by 1 percentage point. calculate the decrease in money supply after fed's sale of bonds: $nothing billion.

Consider an economy where government expenditures are 10 and total tax revenues are 10. the supply of labor is fixed at 125 and the supply of capital is fixed at 8. the economy is described by the following equations. y k to the power of 1 divided by 3 end exponent l to the power of 2 divided by 3 end exponent c 2.5 + 0.75 ( y - t ) i 10 - 0.5 r the level of private savings is

If a product goes up in price, and the demand for it drops, that product's demand is a. elastic b. inelastic c. stable d. fixed select the best answer from the choices provided