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Q. What are the predictions of the PPP theory with regard to the real exchange rates? Answer: The real exchange rate among two countries is a broad summary measure of
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Q. Suppose Australia, a land (K)-abundant country and Sri-Lanka, a labor(L)- abundant country both produce labor and land intensive goods with the similar technology. Following t
Problem: a) Write down and explain the Black-Scholes European call option pricing formula. Discuss how call prices it delivers change with each of the inputs to the calculatio
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Q. To answer the following question, please refer to the figure below. Concentrating only at the lower left quadrant, discuss the relationship between the U.S. real money supply a
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Q.. "A good cannot be both land- and labor-intensive." Discuss. Answer: In a two good or two factor models for instance the original Heckscher-Ohlin framework and the factor
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