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What effect do non-tradable goods have on PPP? Answer: The consequence is quite substantial. In 1997 the production of non-tradable goods accounted for about 55% of U.S GNP.
Q. Albania refused to engage in international trade for ideological reasons. To maximize its economic welfare it could choose to produce at which point in the diagram above? Sup
Q. "Fixed exchange rates are not even an option for most countries." Discuss. Answer: Durable fixed exchange rate arrangements may possibly not even be possible unless c
Assume that Deborah Electronics expects a delivery of Fujitsu laptops in a month from a Japanese supplier. Each laptop sells at $1000 in a retail market whereas the import cost is
what are the limitations of net barter terms of trade
Q. Suppose Russia's inflation rate is 200% over one year, but the inflation rate in Switzerland is only 2%. According to relative PPP, what should happen over the year to the Swis
Q. Write about the assumptions of the theory of consumer behavior based on the cardinal utility approach. 1. Rationality- It is assumed that the consumer is a rational being in
Q. Using a figure, show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run. Answer: A t
The Russian financial crisis
What constitutes the basis for trade? What are the gains from trade in terms of production and consumption? Use theories and examples from a country of your choice.
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