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Economics

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1.Why do countries like the United States, Germany, and Japan all seem to be converging to the same level of per capita GDP?

2.

Dear Colleagues,

In The Wealth of Nations, Adam Smith wrote:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.

The Wealth of Nations, Book I Chapter II

A personal note about myself; I volunteer teaching financial literacy and job training skills to incarcerated women.

Suppose you were recently released from prison and working on your first interview meeting.

From the following two skits, which one would you choose and why? The interviewee is “Mr. Adam Smith”.

Skit 1:           You -                Dear Mr. Smith, thank you for considering me for this position.

Mr. Smith -      You are welcome and thank you for meeting me. Tell me about yourself

You                  Thank you Mr. Smith. I really need this job as I have 3 kids, my son is somewhere in Kentucky, my daughter is abused by her boyfriend and my third child live with my mother in Chicago. My Mom has diabetes and my Grandmother has cancer and I need to support them as they do not have insurance …….

Mr. Smith -      Thank you for sharing and we’ll get back to you in two weeks.

You                  Thank you Mr. Smith.

Skit 2

You -                Dear Mr. Smith, thank you for considering me for this position.

Mr. Smith -      You are welcome and thank you for meeting me. Tell me about yourself

You                  As you can see Mr. Smith, I have been in prison for 4 years for selling drugs. Being in prison is tough as you need to have the requisite skills to survive. This usually means you need to negotiate with fellow prisoners, for example, “I’ll give you a piece of cake if you give me your ice cream.”

Mr. Smith -      Thank you for sharing and we’ll get back to you in two weeks.

You                  Thank you Mr. Smith.

Given the above quote by Adam Smith, “Which skit do you believe would give you a higher chance of obtaining the job and why?

3.Suppose commercial Bank A receives a new $100 deposit. a. What will be the total change in money supply as the result of this increase in deposits? Explain in detail. b. Discuss any ONE reason why the total change in money supply can be less that your answer in part a). (Think about what does the change in money supply depends on).