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Problem: Monetary Approach
a) For a time, Argentina pegged its exchange rate to the U.S. (a country with a stable price level) as a way of guaranteeing low inflation in their own country. Use the equation for the 'monetary approach to exchange rates' to explain why a fixed exchange rate should have this benefit for Argentina.
b) Suppose Argentina has a growth rate in output (Y) that is higher than the U.S. Use the monetary approach equation to explain whether this creates a problem for the use of a fixed exchange rate to the US dollar to guarantee stable low inflation for Argentina.
Barriers to entry, such as patents, licenses, or international trade restrictions, may be government imposed. How do government-imposed barriers such as patents impact consumers and suppliers in these markets?
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assume that the combined consumer goods capital goods values for points a b and c are 20 billion 40 billion and 38
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