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What happens to the exchange rate of the Norwegian krone against non-euro currencies? How is Norway affected?
Why did the Economist think the opposite would occur soon after Britain exited the ERM?
Why would the failure to create a unified EU labor market be particularly harmful to the prospects for a smoothly functioning EMU?
If these estimates are correct, what is the effective rate of protection received by European aircraft producers?
Calculate the total effect on welfare of a tariff of 5 per unit levied on imports. Calculate the total effect of a production subsidy of 5 per unit.
Discuss the potential economic costs of such an expansion of the European Union, from the point of view of Western Europe, Eastern Europe and other nations.
Explain how this can prevent development of a domestic industry, and how infant industry protection can help.
Suppose a country has the Harris-Todaro problem. What policy or combination of policies would you advocate to solve this problem?
If the United States had its way, it would demand that Japan spend more money on basic research. Analyze why in terms of the analysis of appropriability.
Can you think of reasons why a government might be concerned about a large current account deficit or surplus?
What is the price of a bratwurst in terms of hot dogs? All else equal, how does this relative price change if the dollar appreciates to $1.25 per euro?
Suppose the dollar interest rate and the pound sterling interest rate are the same, 5 percent per year. What is the new equilibrium $/£ exchange rate?
Compute the effect on the current dollar/euro exchange rate, assuming current interest rates on dollar and euro deposits do not change.
Suppose the dollar exchange rates of the euro and yen are equally variable. As a U.S. resident, which currency, the euro or the yen, would you consider riskier?
Do you have any guesses about how the liquidity of euro and yen deposits may be changing over time?
Calculate velocity for the two countries in 1985. Why do you think velocity was so much higher in Brazil?
Calculate the 1984-1985 rates of money supply growth and inflation for the United States and Brazil, respectively.
Why do governments typically institute currency reforms in connection with broader programs aimed at halting runaway inflation?
What is the short-run effect on the exchange rate of an increase in domestic real GNP, given expectations about future exchange rates?
How would you expect a fall in a country's population to alter its aggregate money demand function?
What is the forward premium on euro? What is the difference between the interest rate on one-year dollar deposits and that on one-year euro deposits?
How would such a tax alter the analysis of the interest parity condition? How does answer change if tax applies to interest earnings but not to capital gains?
Suppose that instead of 1200 workers, Home had 2400. Find the equilibrium relative price. What can you say about the efficiency of world production?
Japanese labor productivity is roughly the same as that of the United States in the manufacturing sector. What is wrong with this argument?
How does the fact that many goods are nontraded affect the extent of possible gains from trade?