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Explain the idea of transparency, and how nontariff measures may be nontransparent.
The Uruguay Round of the GATT began a process of phasing out the use of voluntary export restraints. Why did nations use them instead of tariffs?
In addition to the production and consumption side deadweight losses, what are some of the other potential costs of tariffs?
What are the values of consumer and producer surplus? How much revenue does the government earn from the tariff?
In the text, the point is made that the expectation of a crisis from volatile. How can a crisis develop as the self-fulfillment of the expectation of a crisis?
Why would macroeconomic policy coordination help, who should coordinate, and what are some of the obstacles to coordination?
what would be the effects on income, consumption, employment, and real exchange rates of policies designed to reduce or eliminate a current account deficit?
Some countries have fixed exchange rate systems instead of flexible systems. How does the exchange rate system limit their ability to use monetary policy?
Describe the mechanism that leads from a change in fiscal policy to changes in interest rates, the exchange rate, and the current account balance.
What are some of the problems in trying to use fiscal and monetary policies?
Explain the concepts of fiscal and monetary policy. Who conducts them and how do they work their way through the economy?
Why do some economists claim that the most important feature of any exchange rate system is its credibility?
If, contrary to your expectations, the forward and spot rates are the same, in which direction would you expect financial capital to flow? Why?
Brazil, Argentina, Paraguay, and Uruguay are members of MERCOSUR a regional. What issues should they consider before they accept or reject a common currency?
Disucss strongest argument for a floating rate is that it frees macroeconomic policy from taking care of the exchange rate. This is also the weakest argument.
In a fixed exchange rate system, how do countries address the problem of currency market pressures that threaten to lower or raise the value of their currency?
If U.S. visitors to Mexico can buy more goods in Mexico than they can in the United States. Why is the dollar undervalued or overvalued? Explain.
What is the real exchange rate? In real terms, has the dollar appreciated or depreciated against the yen?
Suppose the U.S. dollar-euro exchange rate is 1.20 dollars per euro, and the U.S. dollar-Mexican peso rate is 0.10 dollars per peso. What is the euro-peso rate?
Draw a graph of the supply of and demand for the Canadian dollar by the U.S. market. Diagram the effect of each of the following on the exchange rate.
What are the competing merits of revaluing the GDP of other countries through the market foreign exchange rate, and purchasing power parity?
Why can the substitution of American market prices for arbitrary planning prices overcome this ambiguity, if products and characteristics are correctly matched?
Without them, economists can only guess the structure of Pareto efficient supply and demand. What does this imply about the limitations of data adjustment?
Why have liberalization and globalization failed to reverse the negative effects of Continental European, Japanese, Chinese and Russian systemic inefficiencies?
How might trade hurt a country if it imports goods that are produced under conditions of external economies of scale?