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Question 1:
(a) Using examples, explain how the theory of Purchasing Power Parity conforms to the Law of One Price.(b) According to you, how best does the Theory of Purchasing Power Parity explain exchange rates?(c) What are the factors influencing exchange rates in the long run?
Question 2:
The main difference between Federal Reserve System and other government agencies in the United States is its independence.
Describe why the Central Bank is expected to be more independent.
Economic growth and Economic development: Economic Growth refers to an increase in real aggregate output (real GDP) reflected in increased real per capita income.A country is
2. Suppose the price of printing paper for digital cameras has recently risen by 10 percent due to an increase in the cost of materials used in the finish for the paper. As a resu
subsitution effect dominate tha income effect in which good case?
Consider two individuals M and F who must split 20 units of good X and 10 units of good Y. Suppose we can represent M's preference with the utility function Um =X ^2 mYm and Fs
The Snob Effect - If network is negative externality, a snob effect exists. * The snob effect refers to desire to own unique or exclusive goods. * The quantity demanded o
Q. What is Heterodox Economics? Heterodox Economics:Different schools of thought (including post-Keynesian, Marxian, structuralist and institutionalist economics) which reject
You've been contacted by a local semi-professional team in Colfax, known locally as the Colfax Thunder. They play their home games at the HS baseball park for only $100 per month.
What is the role of profits in a market economy? Profits act as an incentive to producers and potential entrepreneurs, and also as a signal to both that resources may be re-al
Exercise on Demand, supply and market equilibrium Given the following determinants of demand and supply, briefly explain, using appropriate diagram, the nature of relationships be
The minimum wage was increased in 1996 amid cries by various economists that it would cause unemployment. Critics shown that the last time the minimum wage went up the si
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