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1. Why might European Monetary System provisions for the extension of central bank credits from strong-to weak-currency members have increased the stability of European Monetary System exchange rates?
2. Why would the failure to create a unified European Union labor market be particularly harmful to the prospects for a smoothly functioning Economic and Monetary Union?
Firms in the market for soccer balls are selling in a purely competitive market. A firm in the soccer ball market has an output of 5,000 balls, which it sells for $10 each. At the output level of 5,000 the average variable cost is $6.00, the average ..
Elucidate how a profit from selling the drug. This is, in part, due to the fact to the company spent $1.2 billion developing the drug also obtaining FDA approval.
For each values for the MPC, determine the size of the simple spending multiplier and the total change in real GDP demanded following a $10 billion decrease.
Japanese GDP in 2010 was 480 trillion yen (U.S. GDP, again, was $14.5 trillion). The exchange rate in 2010 was 87.8 yen per dollar. Contrary to China and India, however, Japan had higher prices than the United States: the price level in Japan (conver..
All else held constant, the choice whether to use labor intensive production process or capitla intensive one depends on; 1. whether the compnay is growing or shrinking. 2. the relative prices of capital labor 3. the type of market in which the firm ..
Illustrate what would production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a level of production.
Suppose that a small county is considering adding a guard rail to a dangerous curve by a river. The guard rail will cost $70,000. The average damage done to vehicles that slide off the road at the curve is $10,000. It is expected that the guard rail ..
Prove the Heckscher-Ohlin theorem. Assume two different sets of factors abundances for two countries and derive the resulting free trade triangle. Use the combination of words and graphs for the answer.
If a recessionary gap were to appear, how might the economy adjust? Can/should we rely on it to adjust itself? Is it possible that the economy will never adjust to a gap, and things will just get worse and worse?
When a leading developing country defaults on its loan to foreigners, discuss (with the aid of loan able funds market diagram) why interest rates will rise on bonds issued by many other developing countries. Critically evaluate the use of GDP as a us..
Suppose that the government is deciding how wide to make a public road that services one resident named Bob. Bob’s willingness to pay for each meter of road is described by 20 – 2Q. Find the new optimal road width. Graph Bob’s willingness to pay (dem..
If the marginal product of the 4th worker hired is 6, and the marginal product of the 5th worker hired is 4, you should not hire the 5th worker because your profit would decrease since the 5th worker’s marginal product is less than the marginal produ..
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