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Under what conditions will such a policy be welfare enhancing? What problems would arise in practice in the pursuit of this kind of policy?
Preclusion of borrowing in the Ramsey model Consider the household optimization. How do the results change if consumers are not allowed to borrow, only to save?
Devoting a larger share of national output to investment would help to restore rapid productivity growth. Under what conditions is the statement accurate?
Under what circumstances does absolute convergence imply a decline in the dispersion of per capita income?
How might liability dollarization worsen the financial market disruption caused by a sharp depreciation of the domestic currency against the dollar?
which looked at data for a group of currently industrialized countries, found that those that were relatively poor a century ago subsequently grew more quickly.
How might a developing country's decision to reduce trade restrictions such as import tariffs affect its ability to borrow in the world capital market?
Do price reductions always result in higher profits? Example, if demand for firm's product is price inelastic, will firm increase its profits by cutting price?
How would the domestic nominal interest rate be related to the foreign nominal interest rate? What if the crawling peg is not fully credible?
Given that I = $20,000, P=$10, and P'=$5, determine: A. The price elasticity, e(Q,P) B. The income elasticity, e(Q,I)
Question: An increase in elasticity of demand will increase monopoly power. This is absolutely correct.
A barrier to entry creates an advantage for incumbents over new arrivals. True or false, explain.
How can the firm use the information contained in the elasticity coefficient to determine pricing policy for profit maximization?
How would this affect the elasticity of demand for gasoline? Would the tax be more or less effective now in reducing imports?
Problem: Alternative institutional environments. What does this result imply about the Pareto optimality of the decentralized outcomes?
What is the arc cross elasticity of demand between Stopcays’ toothbrush and Decayfighter toothbrush?
Also note, the data is in log. Remember the secret for determining elasticity when the regression is log-log.
Why might covered interest parity fail to hold when deposits issued in different financial centers are compared?
Under which exchange rate regime would the gains from international asset trade be greater, fixed or floating?
Why would the failure to create a unified EU labor market be particularly harmful to the prospects for a smoothly functioning EMU?
Imagine instead that the task had been left to the various national central banks. What problems can you see arising from such a scheme?
In what way might ERM membership have gained credibility for British policy makers? (Britain entered the ERM in October 1990)
How an increase in the size and frequency of unexpected shifts in a country's money demand function affects the level of economic integration.
What happens to the exchange rate of the Norwegian krone against noneuro currencies?
What would have been the maximum possible difference between the interest rates on six-month lira and DM deposits? On three-month deposits?