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1. What factors determine the sensitivity of net exports to the interest rate?
2. Consider the cases where net exports are very sensitive to the interest rate and where they are very insensitive. Compare the effect that an increase in the money supply has on output, the interest rate, investment, and the trade balance for each case.
3. Suppose foreign manufacturers maintain a fixed dollar price for their goods regardless of the exchange rate. Does this result in net exports being more or less expensive to the interest rate?
4. Given this behavior, explain why the only way the monetary authorities could act to reduce the trade deficit is by introducing a recession.
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q.the total demand as well as for money is equal to the transactions demand as well as plus the asset demand as well as
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Outline and describe in order of sequence the key items that led to the War of Independence. Explain why the navigation laws were so important to England. Explain the whys of the policy of salutary neglect.
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Total time available is 168 hours per week. Suppose Toni's wage rate is $10 per hour, the price of the consumption good is $1 per unit, and non labor income is $320 per week. If Toni chooses to take 118 hours of leisure per week, how much of the cons..
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