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Use the model from chapter 5 of the textbook to predict how each of the following shocks would affect national saving (S), investment (I), the trade balance (NX), and the real exchange rate (e) in a small, open economy with perfect capital mobility, all else equal. For each shock, be sure to clearly state a prediction for all four variables, illustrate your predictions with the relevant diagrams, and explain your predictions intuitively in words.
a. Technological progress increases domestic total factor productivity.
b. The world’s supply of loan able funds decreases.
c. Rising domestic real estate prices increase aggregate domestic household wealth
the basic question in this case is whether airbus and boeing should work together to develop a new vlct airframe or
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If demand for a product falls at the same time supply rises, which of the following might we expect?
Changes in real GDP serve as a better measure of the health of the economy than GDP because real GDP measures:
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Presume that the dependent variable in your regression has a non-normal distribution, even after controlling for the x variables (In other words, MLR.6 is violated). Under what circumstances can the OLS coefficients and standard errors still are util..
About thirty United States localities circulate their own currency with names like "Ithaca Hours" and Dillo Hours." Doing so is perfectly legal although through law they are subject to a 10% federal tax, which currently the government is not collecti..
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Managers are very interested in how a consumer makes a choice among alternatives. In this exercise, we ask you to consider the amount of money you spend purchasing gasoline to operate your automobile for a month and any alternatives available to y..
What is the reason for assuming the zero inflation rate for the calculations under annualized equivalent method
A small-volume foreign auto maker limits the number of its franchised dealers in the United States and gives them exclusive territories. There are also non-dealers who have no official connection with the manufacturer.
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