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q what are the main functions of moneyanswer money serves generally three important functions that are a unit of account a medium of exchange
qwhat are the factors that determine the amount of money an individual desires to holdanswer three major factors that are first one the expected
q what are the main factors determining the aggregate money demandanswer three major factors the price level interest rate and real national
qexplain why one can write the demand for money as follows md p l r yanswer the collective money demand is proportional to the price level imagine
q what will be the effects of an increase in the money supply on the interest rate answer an enhance in the money supply will origins the interest
q at the conclusion of world war i germany as a punishment was obliged to take a large transfer to france in the form of reparations is it possible
q it is impossible for economic growth in a small country to lower that countrys economic welfare regardless of the bias of the growth explainanswer
2 if a countrys growth is biased in favor of its import this should unequivocally improve its terms of trade and its economic welfare discussanswer
q other things being equal a rise in a countrys terms of trade enhances its welfare what could happen if we relax the ceteris paribus assumption and
q in autarky country p was producing at point 5 with trade could its production point be found above or below point 5 explain why what must happen
q if trade were to open up between r and p where could the world terms of trade locate in the figure above somewhere on the pcpf axis could relative
q why are prices of factors of production not equalizedanswer again this statement may not or may be argued to be true on the other hand the
q why do we observe the leontief paradoxanswer there are several possible answers that they may be categorized into three groups one would argue
q why is the ho model called the factor-proportion theoryanswer the ho model survey the limitations and the nature of presumptuous that the sole
q countries do not in fact export the goods the ho theory predicts discussanswer this statement isnt true that though one may find several cases
q countries that are willing to tolerate an unusually high quantity of pollution relative to their supplies of other factors would leads to export
q international trade leads to complete equalization of factor prices discussanswer this statement is usually truebut under a limited and strict
q there is frequently a conflict between short-term and long-term interests in trade discussanswer in trade models that the short term is usually
q no country is abundant in everything discussanswer the idea of relative country factor abundance is like factor intensities a relative concept
q a good cannot be both land- and labor-intensive discussanswer in a two good or two factor models for instance the original heckscher-ohlin
q calculate the effects of the fall in the relative price of good 2 on the income of the specific factors capital and landanswer for the reason
q suppose the relative price of good 1 falls relative to the price of what happens to the wage rateanswer the labour component of the price of 1
q in 1986 the price of oil on world markets dropped sharply since the united states is an oil-importing country this was widely regarded as good for
q even though it is very clear in the context of the specific factors model that an expansion of international trade will make losers as well as
q one reason international trade has a powerful effect on the distribution of income within countries is that some factors are specific and therefore