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How does a restrictive monetary policy abroad affect the domestic economy under a float? How does this mechanism operate?
What are the principal arguments against a system of floating exchange rates? How do these stand up in the light of experience with floating rates since 1973?
Exchange rate fluctuations since 1973 appear to be larger than warranted by the underlying economic. What reasons have been offered to explain this experience?
How can central banks be caught in a new version of the Meade conflict cases under floating exchange rates?
In what ways is the Asian debt crisis similar to, and different from, the difficulties which Latin America experienced in the early 1980s?
What linkages might this crisis spread to other countries in the region that did not experience the original shock to the first country to experience trouble?
How does the economist's use of the term rent differ from everyday usage? Explain: Land rent performs no ‘incentive function' for the overall economy.
How does Henry George's proposal for a single tax on land relate to the elasticity of the supply of land?
Why is the supply of loanable funds upsloping? Why is the demand for loanable funds downsloping? Explain the equilibrium interest rate.
What are the major economic functions of the interest rate? Which is more relevant in making investment and R&D decisions?
How do the concepts of accounting profit and economic profit differ? Why is economic profit smaller than accounting profit?
Carefully evaluate: All economic profit can be traced to either uncertainty or the desire to avoid it. What are the major functions of economic profit?
Draw an offer curve for the United States that shows its offer of wheat for coffee. Show this US curve intersecting Guatemalan offer curve in inelastic range.
What is the real exchange ratio (terms of trade) in Togo? If Togo consumes 75 million bushels of wheat, after trade begins, how much cloth will it consume?
What will Country A produce after trade? What will Country A consume after trade? Show its consumption point and its trade triangle.
How do increasing-cost conditions affect the extent of international specialization and exchange? Explain.
How is the opportunity to trade with neighboring countries relevant to your answer?
With free trade illustrate the market graphically and compute the total amount purchased, and the amounts supplied by domestic and international suppliers.
Assume now that a quota of 76 units is put in place. Illustrate the resulting market equilibrium graphically.
Compute total demand and the amounts supplied by domestic and foreign suppliers. Compute the cost to the government of this scheme.
How is the opportunity to trade likely to change the structure of the fashion industry and the output of each designer in the industry?
Explain what the index of intra-industry trade shows, and suggest why the values of this index for Japan and Germany are so different.
What assumptions of the factor proportions model does the product cycle model relax or violate?
What role does proximity among producers play in determining whether external economies of scale are achieved?
What is the probable effect of such restrictions on the number of Mexican workers attempting to enter the United States? Explain why.