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Problem
1. Why is relative purchasing power parity (PPP) more likely to hold in a hyperinflationary period than in a more "normal" period of price behavior?
2. Do you think that the monetary approach is a satisfactory explanation of a country's exchange rate? Why or why not?
3. In the portfolio balance model, what effect, other things equal, will a foreign government's budget deficit financed by issuing bonds have on the home country's currency value and why? (Assume a flexible exchange rate.)
The supply curve for product X is given by QXS = -300 + 10PX. a. Find the inverse supply curve.
Given an MPC of .8, if the equilibrium level of aggregate expenditure is 80 billion. What will the new equilibrium level of aggregate expenditure be?
Payroll Tax- You are an economic consultant to a city that just imposed a payroll tax of $1 per hour of work. This payroll tax is paid by workers through a payroll deduction.
Suppose that at a price of $400, 300 tickets are demanded to fly from Ithaca to Los Angeles. Now the price rises to $600, and 280 tickets are demanded. Assuming the demand for tickets is linear, find the price elasticities at the quantity-price pair ..
Suppose the total benefit derived from a given decision, Q, is B(Q) = 25Q - Q^2 and the corresponding total cost is C(Q) = 5 + Q^2, so that MB(Q) = 25 -2Q and MC(Q) = 2Q.
Using Keynesian model and Classical model, analyzed the effect of balanced budget (when the government increases the government expenditure and tax by the same amount not to affect the government deficit) on output (Y), interest rate (r) and price ..
In discussing whether globalization leads to greater inequality how does Sen argue the apologists for globalization respond to such issue?
With a constant world interest rate, full employment, and an initial trade surplus of zero, a tax cut in a small open economy.
Gail has purchased a relatively unknown Stradivarius violin with a value of $2,000,000 which she plans to play every day (and therefore must keep at home). Gail is risk-averse. She is concerned about the potential loss of the violin through fire
The low wages offered by employers in the state have given fewer teenagers the incentive to find summer employment. Instead of working all summer, the way we used to do, today's teenagers slack off and cause trouble. To address this problem, I pro..
Do you think the argument against redistributing income through income taxes based on reducing economic efficiency is a strong one. Provide an example where a business did not expand because the possible taxes on the profits due to that expansion.
Currently, the island of Guam does not have a minimum wage need but uses the United States minimum wage as a reference. Give a theoretical justification for why imposition of a $5.15 minimum wage.
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