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Find one article in favor of globalization and international trade and one article against. Compare and contrast the arguments in the articles.
How would such a surplus be offset elsewhere in the balance-of-payments accounts? What is the role of the statistical discrepancy?
Arbitrageurs How do arbitrageurs help ensure that exchange rates are the same in markets around the world?
Purchasing Power Parity According to the theory of purchasing power parity. Why is the theory more suitable for analyzing events in the long run?
This finding seems to call for a rejection of the purchasing power parity theory. Explain why this index may not be a valid test of the theory.
What is a managed float? What are the disadvantages of freely floating exchange rates that led countries to the managed float system?
Productivity and Development Among problem that hinder growth in developing economies is poor infrastructure. How does privatization contribute to productivity?
From the past two years, choose one article about a foreign country. What did you learn about international finance in that country?
Read the article China's Exchange Rate Reform on Right Track. What is China's exchange rate policy?
Why would China want its own currency to be undervalued relative to the U.S. dollar? How does China maintain an undervalued currency?
Merchandise Trade Balance Explain why a U.S. recession that occurs as the rest of the world is expanding will tend to reduce the U.S. trade deficit.
What are the arguments for using real per capita GNI to compare living standards between countries? What weakness does this measure have?
Describe some of the problems in achieving such an objective through foreign aid.
From the perspective of citizens in a developing country, what are some of the benefits and drawbacks of international trade?
Assuming such growth rates continue indefinitely into the future, how many years would it take before per capita income in the Congo exceeds that of the US?
Explain why domestic producers who supply a good that competes with imports would prefer? Which policy would domestic consumers prefer and why?
Read the article Uzbekistan Aims at Import Substitution. What is limiting the success of Uzbekistan's import substitution strategy?
Find one article supporting the work of the World Bank and one article against. Compare and contrast the arguments in the articles.
Equation of Exchange Using the equation of exchange, show why fiscal policy alone cannot increase nominal GDP if the velocity of money is constant.
Why has the Federal Reserve chosen to focus on the federal funds rate rather than some other interest rate as a tool of monetary policy?
What is the relationship between the rate of money supply growth and the inflation rate? How does this explain the hyperinflation experienced in some economies?
How does the Fed raise or lower that rate, and how is that rate related to other interest rates in the economy such as the prime rate?
What is your average money balance during the pay period? How would each of the following changes affect your average monthly balance?
Using an AD-AS diagram, illustrate and explain the short-run and longrun impacts of an increase in the money supply.
Why should the Fed increase or decrease the money supply? If the Fed uses open-market operations, should it buy or sell government securities?