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Since the early 1980s, foreign portfolio investors have purchased a significant portion of U.S. treasury bond issues. Discuss the short-term and long-term effects of foreigners’ portfolio invest
Comment on the following statement: “Since the U.S. imports more than it exports, it is necessary for the U.S. to import capital from foreign countries to finance its current account deficits.&r
In contrast to the U.S., Japan has realized continuous current account surpluses. What could be the main causes for these surpluses? Is it desirable to have continuous current account surpluses?
The United States has experienced continuous current account deficits since the early 1980s. What do you think are the main causes for the deficits? What would be the consequences of continuous U.S. c
Assess the possibility for the euro to become another global currency rivaling the U.S. dollar. If the euro really becomes a global currency, what impact will it have on the U.S. dollar and the world
In an integrated world financial market, a financial crisis in a country can be quickly transmitted to other countries, causing a global crisis. What kind of measures would you propose to prevent the
Rebut the above criticism from the viewpoint of the proponents of the flexible exchange rate regime.
Suppose that the pound is pegged to gold at 6 pounds per ounce, whereas the franc is pegged to gold at 12 francs per ounce. This, of course, implies that the equilibrium exchange rate should be two fr
In the City of Joplin, due to weather devastation and hurricane effects, the cost of parking in the local Square has increased by 20%. This change
You should have 8 graphs. The written answer should be set up under the graph as follows: Price: Increase/Decrease (select one) Quantity: Increase/Decrease (select one) Determinant: One of the determi
For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AF
Suppose your local Congress representative suggests that the federal government intervenes in the gasoline market to stop runaway price increases. Would you say that this view basically supports the K
Assume that the consumption of schedule for a private open economy is such that consumption C = 50 + 0.8Y. Assume further that planned investment Ig and net exports Xn are independent of the level of
Sometimes market activities (production, buying and selling) have unintended positive or negative effects outside the market's scope. TI know that is an externality.
Suppose the government decides to decrease spending and increase taxes in an attempt to decrease its deficit. Is it possible for the Fed to ease the macroeconomic effects of the spending and tax chang
What is the new deficit? Explain carefully why the deficit is not zero. c. Suppose the F-L amendment was not in effect and planned investment falls to I = 55.What is the new value of GDP?
During 2003, we began to stop worrying that inflation was a problem. Instead, we began to worry about deflation, a decline in the price level.Assume that the Fed decided to hold the money supply const
Suppose Fred deposits $8,000 in cash into his checking account at the Bank of Bonzo. The Bank of Bonzo has no excess reserves and is subject to a 5 percent required reserve ratio.
If you assume that wealth (W) and investment (I) remain constant (we are ignoring the fact that saving adds to the stock of wealth), what are the equilibrium levels of GDP (Y), consumption (C), and sa
In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of n
Define inflation.Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January 1, 2010, fish sold for $2.50 per pound, meat
Antonio, an accountant working for the city of Santa Cristina,decides to forego his annual vacation to Hawaii when word leaks out that the city may be cutting all employees’ salaries by 10 perce
Suppose the market demand for pizza is given by Qd = 300 - 20P and the market supply for pizza is given by , where (per pizza): Qs = 20P - 100
The nation passes a law requiring all employers to give their employees 16 weeks of paid vacation each year. Prior to this law, employers were not legally required to give employees any paid vacation
Does the principle of “increasing opportunity cost” hold in this nation? Explain briefly. (Hint:What happens to the opportunity cost of bread—measured in number of ovens—as bre