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How does overshooting help to resolve the empirical behavior of exchange rates in the short run versus the long run?
Illustrate how this change affects the money and FX markets. Label your short-run equilibrium point B and your long-run equilibrium point C.
Suppose the Bank of Korea permanently decreases its money supply. Illustrate the short-run and long-run effects of this policy.
Illustrate how this change in investors' expectations affects the Indonesian money market and FX market, with exchange rate defined as rupiahs per U.S. dollar.
Assuming that once a country joins a currency union, it will not leave, do these countries face the policy trilemma discussed in the text? Explain.
During the Great Depression, the United States remained on the international gold standard longer. Discuss how the policy trilemma applies to this situation.
What news was contained in the minutes that caused traders to react? Explain using the asset approach.
How would each of the following events affect the exchange rate, defined as Confederate dollars per Union dollar, EC$/$?
What can we say about the productivity of housekeepers in Singapore versus the Philippines? Explain. What is the total gain to the housekeeper from migrating?
The gravity equation relationship does not hold in Heckscher-Ohlin model. Explain how the logic of the gravity equation breaks down in Heckscher-Ohlin model.
Of two products, rice and paintings, which product do you expect to have a higher index of intra-industry trade? Why?
Draw relative labor supply and demand diagrams for Home and Foreign showing the effect of this change. What happens to the relative wage in each country?
Starting from a no-trade equilibrium in a PPF diagram illustrate the gains from offshoring if United States has a comparative advantage in component production.
Read the following excerpt, and using what you have learned in this chapter, discuss how offshoring creates opportunities for the countries involved.
It is widely noted that even though China is the favored destination. What differences between these two countries might account for this observation?
What is the implication for its steel tariffs applied to all other countries according to the most favored nation principle?
If the foreign export supply is less than perfectly elastic, what is the formula for the optimal tariff Home should apply to increase welfare?
Why did President George W. Bush suspend the U.S. tariffs on steel 17 months ahead of schedule?
Why did major tire manufacturers operating in the United States, such as Goodyear, Michelin, Cooper, and Bridgestone, not support the tariff?
Illustrate the losses for the Home country. In view of your answers to (a) and (b), why are antidumping cases filed so often?
What is a positive externality? Explain the argument of knowledge spillovers as a potential reason for infant industry protection.
Describe the impact of Reduction of agricultural tariffs goals from Hong Kong WTO meeting on (i) domestic prices and welfare of the country taking the action.
Are there gains or losses to the large country, or is it ambiguous? What is the impact on domestic prices for agriculture and on the world price?
America's GDP per capita in 2013 compared to its GDP in 1950? How does Cuba's and China's GDP in 2013 compare to America's GDP in 1950?
Determine the MRT of steel into aluminum for each nation. Describe the trade triangles for Canada and France.