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Evaluate this view in terms of the external economy model.
What about welfare in the two countries? Suppose, on the other hand, that Country Y retaliates with an export subsidy of its own. Contrast the result.
China was the first to open up. Now that India is also opening up to world trade, how would you expect this to affect the welfare of China?
Create a standard trade model for the U.S. and Indian economies that shows how relative price declines in exportable services.
Counterpart to immobile factors on supply side would be lack of substitution. Show that an improvement in the terms of trade benefits this economy as well.
Illustrate the gains from trade between the two countries using the standard trade model, assuming first that tastes for the goods are same in both countries?
Is this a shortsighted policy or a rational one in view of the interests of union members? Analyze How does the answer depend on the model of trade?
Can we still say that raising cattle is land-intensive compared with farming wheat? Why or why not?
Suppose the real interest rate increases to 5%, but everything else remains as in part (a). Compute the debt-to GDP ratio in 10 years.
What is the primary deficit/surplus ratio to GDP? What is the inflation-adjusted deficit/surplus ratio to GDP?
New Zealand rewrote the charter of its central bank in the early 1990s to make low inflation its only goal. Why would New Zealand want to do this?
Suppose the government amends the constitution to prevent government officials from negotiating with terrorists. What are the advantages of such a policy?
Find the current nominal interest rate on Treasury securities with five-year maturity. Now find current interest rate on inflation indexed Treasury securities.
How might policy changes in (a) through (d) affect the wage gap between low-skill and high-skill workers in the United States?
What was the purpose of this symbolic gesture? How can the Fed's decision to use expansionary monetary policy in the future affect the short-run response?
How effective coal regulator would be to avoid monopoly situation in coal industry in case pricing is kept out of its remit?
What steps have been taken by government to overhaul coal sector? How is price decided in coal industry where there is situation of near monopoly?
How are the conclusions of MMT imiportant for macroeconomic policy in an open economy?
How would you describe the macroeconomic worldview of David Ricardo, Karl Marx, and John Stuart Mill?
If the world oil price increases significantly, other things equal, what would be the effect on Latin America GDP? Why?
GDP (or GDP per capita) is a common measure for a country's standard of living. Discuss the shortcomings of using GDP in this way.
Find the new price after the cut off. What would happen if the US government imposes a price ceiling on gas at $3 per gallon.
How would the shift to a fully funded system affect the level and the rate of growth of output per worker in the long run?
In what sense is money neutral? How is monetary policy useful if money is neutral? Why then is monetary policy considered neutral but fiscal policy is not?
Why is the amount of R&D spending important for growth? How do the appropriability and fertility of research affect the amount of R&D spending?