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How do managed floating exchange rates operate? Why were they adopted by the industrialized nations in 1973?
Define and explain the three key economic ideas: 1) people are rational; 2) people respond to economic incentives; 3) optimal decisions are made at the margin.
The Heckscher-Ohlin theory demonstrates how trade affects the distribution of income within trading partners. Explain.
How does the Leontief paradox challenge the overall applicability of the factor-endowment model?
What is meant by the foreign-exchange market? Where is it located? What is meant by the forward market? How does this differ from the spot market?
What is the strategy of speculating in the forward market? In what other ways can one speculate on exchange-rate changes?
What is meant by a firm in perfectly competitive market? For a given price , explain how the firm chooses the level of output that maximizes profit.
What are the various ways in which this objective can be achieved? Explain with appropriate demand and supply diagram.
Why are the benefits of reducing inflation permanent and the cost temporary? Why are the cost o increasing inflation permanent and benefits temporary?
How does the use of addictive drugs destroy our youth and productivity in the workplace? Is there always a sign that someone is an illegal drug user?
What should happen to price of a drug when the patent runs out? Explain with suitable diagrams.
What are the goals of macroeconomics policy of democratically elected government will like to persue?
What happens to c at the time of the change? Find an expression for the impact of a marginal change ing on the fraction of output that is saved on the balanced.
Find the path of z given its initial value, z(0). In the conjectured solution, are the equations of motion for c and k, (2.24) and (2.25), satisfied?
Draw the phase diagram showing the dynamics of c and k after time t1. Can c change discontinuously at time t1? Why or why not?
How does a marginal increase in T affect the welfare of current and future generations? What happens if initial balanced growth path is dynamically inefficient?
Describe the decentralized equilibrium of this economy. Consider paths where the fraction of agents' endowments that is stored.
Sketch a graph of the growth rate of X as a function of time. Sketch a graph of ln X as a function of time.
At the time of the jump, does output per unit of effective labor rise, fall, or stay the same? Why?
Find expressions for k*, y* and c * as functions of parameter of the model, s, n, d, g and a. What saving rate is needed to yield the golden-rule capital stock?
Which variable would you drop and why? If you drop one or more X variables, what type of error are you likely to commit?
Do a bivariate regression of taste on lactic and H2S. How do interpret the results? What overall conclusions can you draw from your analysis?
What will be the effect of this on the prices of residential houses? Follow the eight-step procedure discussed in the text to answer this question.
What factors would you take into account in your advice? How would you use econometrics in your advice?
To reduce the dependence on foreign oil supplies, government is thinking of increasing federal taxes on gasoline. How would you go about advising the company?