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Using the simple national income model:
Y = C + Io + Go
C = a + bY
where Io and Go are exogenous variables, and Y and C are endogenous variables, and a, b are constants.
Set up this model in a matrix form and solve for: Y, C in terms of Io, Go, a, and b
Determine the impact of changes in Go and Io on Y and C.
Why is a nation's real interest rate more important for international investors than the nominal interest rate? Explain the relationship between a country's interest rate and its exchange rate.
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Which of the following must be true in an economy with a government but with no foreign trade?
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Consider a circular city of length L in which the consumers are uniformly distributed and firms decide sequentially whether to enter the market in the first stage, and then decide simultaneously its price in the second stage. Every consumer buys one ..
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Elucidate why or elucidate why not. Does it matter whether the inflation is expected or unexpected.
What are non-price factors that would affect either a movement along the line or a shift?
Why should managers and/or analysts add a premium to the weighted average cost of capital (WACC) when determining discount
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