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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.
Q. How can international trade in assets make both countries better off? Answer: By permitting them to reduce the riskiness of the return on their wealth and by allowin
Q. The United States, as it began its long and unbeaten growth in the early 19th Century, consciously promoted domestic production through such activities as tariffs, Clay's Ameri
explain the newo clacical theory of international trede
Q. In autarky, Country P was producing at point 5. With trade, could its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio
If one were to use the simple monetary model to predict the $/Euro exchange rate (L is constant), what would the expected exchange rate be?
Q. What do you think about international? Answer: A prescribed procedure whereby a country is able to seek international legal authorization to temporarily stop paying i
briefly summaries the alternative explanation to the theory of international trade?
what are the limitations of net barter terms of trade
which book by adam smith explains the absolute advantage ?
Q. Present the case for floating exchange rates. Answer: 1. Monetary policy autonomy Governments would able to use financial policy to reach internal and extern
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