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Q. "Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lead to future increase in the price level." Discuss.
Answer: The statement is true that the pressures come from three major sources that are excess demand for output and labor and inflationary expectations and raw material prices.
Q. Explain how the timing of a balance of payment crisis is determined. Be careful to state all assumptions. Answer: The assumptions of the model are: Prices are el
What exactly is IMF and why is it so important in helping Europe? How exactly does it help Europe and what effects does its help have on rest of the world?
WHATE IS THE PROPERTY OF OFFER CURVE OF A COUNTRY
Q. Discuss the relationship between PPP and the Law of One Price. Answer: The law of one price is applies to individual commodities while Purchasing Power Parity appli
construct a production possibilities frontier that represents japan''s goal of producing both cars and housing. Assume the japanase economy is in a downtyrn and indicate with an Xt
critically evaluate Adam Smith''s theory of absolute advantage,outlining the assumptions necessary for the theory to hold in its purest form.what are the criticisms of this theory
Q. Using the diagram, show what happens to the composition of production (that is quantity of cloth per 1 unit of food) in Australia once trade is established between the two coun
Critically evaluate adam smith''s theory of absolute advantage, outlining the assumptions necessary for the theory. Criticism of the theory?
Q. "No country is abundant in everything." Discuss. Answer: the idea of relative (country) factor abundance is (like factor intensities) a relative concept. When we recogniz
Q. It is argued that import substitution is a misguided trade policy if the intent is to show long-term economic growth. Illustrate the reasons underlying this argument. Answe
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