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1. Would increased cost inflation in the United States relative to its major trading partners likely increase or decrease the value of the U.S. dollar? Why?
2. If the domestic prices for traded goods rose 50 percent over 10 years in Japan and 100 percent over those same 10 years in the United States, what would happen to the yen/dollar exchange rate? Why?
jack owns an auto repair shop, specializing in European cars. With three full-time mechanics, Jack's shop repairs/services 15 cars per week. Each worker is paid $500 per week. By hiring another mechanic, at the same salary, he can increase his wee..
Suppose that the government taxes (at the new set of prices P'x = 1, P'y = 2 ) the consumer an extra 1/2 dollar for each unit of x he buys beyond 70 units. That is no tax for x =70.
Imagine instead that the task had been left to the various national central banks, each of which was allowed to issue as much of the European currency as it liked and to conduct open-market operations. What problems can you see arising from such a..
Why is there an incentive for each member of a cartel to cheat by producing more than the agreed-on amount? What is the "prisoner's dilemma" and how is it related to the problem of cheating? What are the other problems facing cartels?
For the reaction A + 2B → 3C, assume that it follows the stoichiometric relation given. What is the order of the reaction in B? Write down the expression for the rate of disappearance of B and the rate of appearance of A
A friend convinces you that she has a great idea for a business, and the two of you incorporate. You supply her with funds and let her make all of the executive decisions. Under the agreement you hold 30% of the firms stock and your friend holds 7..
Why are some countries today much poorer than other countries? Are today's poor countries destined to always be poorer than today's rich countries? If so, explain why. If not, explain how today's poor countries can catch up or even pass today's ri..
Be sure to indicate the direction of change in Real GDP, the Price Level and the Unemployment Rate. Label all curves and axis for full credit.
Your answer should demonstrate that the prices that are used to calculate real GDP do affect the calculated growth rate, but typically not by very much.
What is the effect of a fiscal expansion on output and interest rates when exchange rates are fixed and capital is perfectly mobile? Show this rigorously, using the model developed in Section 12-5. \
Suppose the owner could engage in price discrimination. Would you expect the number of filled seats to increase or decrease? Explain.
If a corporation operates in a highly competitive industry and competes against many other companies. In the last some years, many new companies have entered the industry and firm now earns a return on investment very close to prevailing interest rat..
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