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Short-run and Long-run equilibrium analysis using PPP model. The effects of a decrease in the domestic money supply. Suppose the Canadian economy was initially in a long-run equilibrium. Suppose that the Central Bank of Canada decided suddenly to implement a one-time decrease in money supply.
(a) Using equilibrium equations explain the long-run effects of a decrease in money supply on output, interest rate, price level and exchange rate. Provide the intuition for your answer.
(b) Using equilibrium equations explain how a one-time decrease in money supply today affects agentsíexpectations today regarding future exchange rate? Provide the intuition for your answer.
Illustrate the short run effects on the macro-economy by using the aggregate supply-aggregate demand model. Be sure to indicate the direction of change in Real GDP, the Price Level and the Unemployment Rate.
Drezner mentions that in this current era of globalization, the international relations community might need to develop brand new theories to explain global governance, rather than relying on theories that took hold in the latter part of the 20th ..
Illustrate what matters is not the absolute abundance of factors, but their relative abundance. Poor countries have an abundance of labor relative to capital when compared to more developed countries.
What business do you want to start, and why? Explain your personal connection to this type of business and discuss sources of information about this business.
Discuss the effects of HIV/AIDS on the economies of african countries. Making sure to discuss the sources of economic growth and the use of scarce resources.
A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor at $7 each or to produce them in-house. Determine the range of annual volume for which each of the alter..
Pat Oliphant's cartoon on the fall of the Berlin Wall cautioned that the euphoria should not make Americans oblivious to the failures of capitalism. Is there any truth behind his point of view?
Assume that the wholesale skim milk market is perfectly competitive. Suppose demand is described by P=5.10-0.80Q and supply is described by P=1.90+0.20Q. If there are no price controls, what would be the equilibrium quantity?
Analyze a market environment with tacit collusion, including deterrents from entry.2. Evaluate the profitability of entering the market.3. Examine how the time horizon affects the profitability of entering the market.
Suppose the government increases both taxes and government purchases by $10,000. Assuming that the marginal propensity to consume is 0.75, calculate the change in private saving, government saving, and total saving. Then draw a graph of the loanable ..
Briefly discuss China’s journey on its economic achievement from pre-independent until today.
Monopolistically competitive firms are inefficient, so why do we allow so many to exist? Monopolistically competitive firms are numerous and prominent. So, what do we gain from them that compensates us for their inefficiency? explain please.
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