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Q. Is it possible that if positive scale economies characterize an industry, that its equilibrium can be consistent with purely competitive conditions? Explain how this would happen.
Answer: Yes if the degree economies were external to the firm afterwards there is no reason why the firms may not be in perfect competition.
Q. Neoclassical and Classical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources; and therefore is an op
Q. How could the U.S. government justify its decision to offer a subsidy to a profitable and successful business? Answer: It could indicate that this $10 million pump-priming
Q. What is the policy of sterilization? Give an example. Answer: • Untainted foreign exchange intervention - policy by which central banks perform equal foreign
Argus Savings and Loan Association began in 1956 in Hometown. As is typical of savings and loan associations, Argus accepts the savings of individuals and organisations and uses th
Q. What explains the sharply divergent long-run growth patterns? Answer: It lies in the political and economic features of developing countries and the way these have
what i deficit balance of payment.
Q. Describe the chain of events leading to exchange rate determination for the following cases: 1. An increase in the U.S money supply 2. An increase in the growth rate of the
Q. Explain the Law of One Price. Give an example. Answer: The law of one price affirms that in competitive markets free of transportation costs and trade barriers ide
Discuss the effects of ongoing inflation based on the PPP theory. Answer: Other things equivalent money supply growth at a constant rate eventually results in ongoing price le
In this year, the Bank of Canada raised the target for overnight rate consistently and continuously. The rate changes are as follows: Date Target (%)
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