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Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate?
Answer: The labour component of the price of 1 is bigger than that of product 2. Therefore a fall in the comparative price of 1 will lower the demand for labour and will result in a decrease in the wage rate.
Q. One of the usually used assumptions in deriving the Heckscher-Ohlin model is that tastes are homothetic, or that if the per capita incomes were the similar in two countries, th
Q. What is securitization? Answer: The term refers to monetary instruments in which bank assets are repackaged in readily marketable forms These kinds of "derivatives"
Q. Suppose Airbus is set to give the aircraft before Boeing. Which company will enter the market? Answer: Boeing will not and Airbus will produce.
what is the publication of opportunity cost theory?
Calculate the doublefactoral terms of trade (TD), formulated by Jacob Viner based on following information: Suppose in the base year of 2015, Px= 100, Pm= 100, Zx= 100, Zm= 100and
Q. "Given that labor remains relatively immobile within Europe, the European Union's success in liberalizing its capital flows may have worked perversely to worsen the economic sta
Q. What is the theory of Second Best? Answer: The principal of the second best notify us that when an economy suffers from multiple distortions the removal of only a few
what is the criticism of opportunity cost
which book by adam smith explains the absolute advantage ?
Q. "A monetary policy is not a policy tool under fixed exchange rates." Discuss. Answer: It is True Under fixed exchange rates domestic asset transactions by the centr
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