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Consider the open-economy loanable funds model with flexible prices and capital mobility. Suppose that the world consists of a small open economy (we call this domestic) and the rest of the world (we call this foreign). Answer the following questions with the aid of figures where appropriate.
a. How does an increase in domestic government expenditure affect trade balance and real exchange rate?
b. How does an increase in foreign government expenditure affect the trade balance and the real exchange rate? How does it affect domestic investment?
c. Suppose that foreign demand for goods from domestic suddenly fall, how would this affect saving, investment, net exports, the interest rate, and the exchange rate for domestic?
d. The government of domestic responds to this policy in order to stabilize the exchange rate. What kind of trade policy can they implement? What would be the effects on investment, net exports, and the interest rate? What about the volume of trade?
When an economy enters expansion, the unemployment rate first increases and then decreases. Why does this happen?
Given the estimated marginal cost function, what is the average variable cost function for EverKleen?
With Milton Friedmans advice in mind, lets go back to explaining what was weird about the survey data where 60% chose Edwards over Obama, 60% chose Edwards over Clinton, 60% chose Clinton over Obama and then when asked to cast a single vote for one o..
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soppose that in one year an american worker can produce 100 shirts or 20 computers while a chinese workers can produce
Obtain Income elasticity of demand and Calculate the quantity demanded for goods 1 and 2 at these prices and this income level.
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A firm with a CD production function Q = 2K 0.5 L0.4 plans to produce 500 units of output per day. Assume the price of labor and capital are w = $50 and r = $100 a day- What is the firm's optimal combination of factors that minimizes its cost
Assume a hypothetical case where an industry begging a perfectly competitive and then becomes monopoly
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Explain how the economic growth of countries such as China, India, Brazil and Vietnam and how it might impact the global food and beverage industry and global consumers.
If the only consumers for snowshoes in Wisconsin live in Madison or Milwaukee, what is the market demand for snowshoes in Wisconsin? What is the equilibrium price and quantity in the market for snowshoes
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