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Question: Describe how each of the following factors might explain why PPP is a better guide for exchange rate movements in the long run versus the short run:
(i) transactions costs,
(ii) nontraded goods,
(iii) imperfect competition,
(iv) price stickiness.
As markets become increasingly integrated, do you suspect PPP will become a more useful guide in the future? Why or why not?
Primary purpose of the legal reserve requirement is to provide a means by which the monetary authorities can influence the lending ability of commercial banks - Exam: 050475RR - MONEY, BANKING AND MONETARY POLICY
A country has the per-worker production function yt = 2kt0.5, where yt is output per worker and kt is the capital per worker. The depreciation rate is d = 0.1 and the population growth rate is n = 0.1. Define the Golden Rule capital-labor ratio (pe..
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