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What are the government's fiscal policy options for a recessionary gap caused by cost-push inflation? Use the aggregate demand-aggregate supply model to show the impact of these p
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 affe
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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 applies to the g
Q. Factor-intensity reversals define a situation in which the production of a product can be land-intensive in one country, and relatively labor intensive in another ( at given re
Q. At the conclusion of World War I, Germany, as a punishment, was obliged to take a large transfer to France in the form of reparations. Is it possible that the actual reparation
Q. Illustrate why Argentina, one of the world's richest countries at the begning of the twentieth century, has become progressively poorer relative to the industrial countries. [
What are disadvantages the classical theory of international trade
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