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A market basket of goods and services that costs $100.00 in the United States costs 800 pesos in Mexico, and the current nominal exchange rate is 10 pesos per U.S. dollars. Over the next five years, the cost of that market basket rises to $120 in the United States and to 1,200 pesos in Mexico, although the nominal exchange rate remains at 10 pesos per U.S. dollar. Calculate the following: Please show your calculation:
a. The real exchange rate now if today’s price index in both countries is 100?
q1. explain how one of the components of the gdp would help you to predict the amount of inventory to keep in stock if
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illustrate what will be the effect of an excess of planned investment over saving in a private closed economy with unemployed resources.
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In a price-fixing agreement amongst two oligopolists, each seller's best strategy would be to maintain the agreement, as it would leave both of them better off. The smaller the share of the fringe firms in an oligopoly market, the smaller will be the..
What difference did the Calvinist notion of predestination play such a critical role in the accumulation of capital in countries such as Switzerland, the Netherlands and Great Britain?
Dusty derives utility from 3 goods: music (M), wine (W), and cheese (C). His utility function is given by: u(M,W,C) = M + 2W + C. Show that Dusty’s MRS of wine for cheese is constant for all values of W and C on the indifference curves calculated in ..
Suppose that the market price for a bottle of vitamins is $2.50 and that at that price the total market quantity demanded is 75,000,000 bottles.
The global movement toward generally freer trade
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Firms in the market for soccer balls are selling in a purely competitive market. A firm in the soccer ball market has an output of 5,000 balls, which it sells for $10 each. At the output level of 5,000 the average variable cost is $6.00, the average ..
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