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Q. What can one learn from the following figure?
Answer: The figure shows the U.S. current account as well as net foreign wealth from 1977 until 1996. It illustrate that a string of current account deficits in the 1980s reduced America's net foreign wealth until by the end 1996 the country had accumulated a substantial net foreign debt. In 1987 the country turns into a net debtor to foreigners for the first time since World War I.
#question.suppose that France has a trade surplus with the United Kingdom. What would you expect to happen to price, wages, and commodity price in France? why? What would happen to
Explain the Global Firms and the Borderless Global Economy
theory of opportunity cost?
Q. In the year 2000, Americans flocked to Paris. What economic forces made French goods seem so cheap to residents of the United States? Answer: One main factor was a sharp f
Suppose that industry 1 is monopolistically competitive, with a CES sub-utility function: U(c1,c2 ) = c1? + c?2 , 0 We let the marginal costs be denoted by c1(w,r), and the fixe
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.
Q. The Brazilian firm is charging its foreign (U.S.) customers one half the price it is charging its domestic customers. Is this bad or good for the real income or economic welfa
Q. What are the main functions of money? Answer: Money serves generally three important functions that are a unit of account, a medium of exchange and a store of value.
Q. Using 4 different figures, plot the time paths showing the effects of a permanent increase in the United States money supply on: A. U.S. money supply. B.
Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e
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