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Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affect present consumption?
Answer: A diminishes in the real interest rate r causes the budget line to rotate counterclockwise about point A diminish the slope and causing a rise in present consumption.
How can I graph partial equilibrium analysis for demand and supply of two countries who have a transport cost of $5?
In the Ricardian analysis, why does each trading partner have an incentive to produce at an endpoint of its production-possibility frontier? Why are prices of factors of production
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Question 1 What are the advantages and disadvantages of trade blocs? Question 2 Identify and explain the various parameters of regional economic integration Question 3 D
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