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Let’s say that there are many non-traded goods relative to traded goods. You are comparing the income of a rich country to the income of a poor country. For the poor country, do you expect PPP-adjusted income to be higher or lower than income calculated using only exchange rates? Explain.
In a system in which there is an administered exchange rate, what is the term used when the government sets the rate higher to buy fewer units of foreign currency?
If you could, how would you alter the way that GDP is defined and measured in the US? Make one recommendation. Explain what the current practice is, how you would change it, and why your proposed change would be an improvement.
A cost-effective policy is always socially efficient. Enforcement costs are critical to the success of environmental program and should be included in the overall social costs of the program when evaluating different policy options
A driver faces a 5% probability that his car will be in an accident and will be worth nothing. Consider three drivers with cars that have value $30,000. Abdulla's utility function over the value of his car W is u(W) = ln(1 + W). Bedriya's utility ..
If MMM's capital structure consists of 25% debt and 75% equity, stated in total funds, what is the WACC break point that is associated with retained earnings
When entry occurs in a monopolistically competitive industry,
explain how governments can contribute, or discourage long run growth through their policies and institutions.
In the model for airline seat pricing, we studied the case of non-refundable tickets. What if the airline offers refundable business class tickets. You can buy a business class ticket and return it for a full refund if you do not fly.
In late 1991 two firms, Delta Airlines and the TRump shuttle, provided air shuttle service between New York and Boston of Washington. The one-way price charged by both firms was $142 on weekdays and $92 on weekends, with lower off-peak advance purcha..
Suppose that Country B has the same amount of net private saving in Year 1 and in Year 2. However, the government of Country B has a budget surplus of $200 billion in Year 1 and a budget surplus of $100 billion in Year 2. Other things equal, this ten..
Governments often need to raise revenues to fund public projects like schools, road maintenance, parks, etc. One way governments raise revenue is to place taxes on the sale of certain goods. Suppose a government is debating whether to raise taxes on ..
Contractionary monetary policy
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