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Suppose that we commence with short term interest rates in Canada and the US being equal, and suppose that both countries are enjoying a rate of inflation of 0%. Then suppose that, in period p, short term interest rates rise in Canada, while remaining unchanged in the US. There is no change in the inflation rates in the two countries. The expected Can$-US$ spot rate in period P+1 remains unchanged. Would the US$, according to the Interest Parity theory, depreciate or appreciate aginst the Can$ in the period p? Would US$ depreciate or appreciate, between p and p+1? why?
In the money market, money supply is determined by the central bank, such as the Fed in the U.S. Because of this, money supply curve is usually vertical in the short run, while the money demand curve is downward sloping. The quantity demanded of m..
Someone claims that the "bargaining" hypothesis appeared in the literature because of a significant flaw in the "comparative advantage" hypothesis. After you briefly explain what these two hypotheses stand for, identify what..
2.suppose you have just been appointed to a high level position in the economic analysis unit of the state department.
Given the following total-revenue function tr=9q-q2 (a) derive the total-, average-, and marginal- revenue schedules from q=0 to q= 6 by 1's
Suppose you suddenly realize that your demand estimates might have some uncertainty in them. How might you change value of surplus you give to the customers because of this?
Name three goods or services with highly elastic price elasticity of supply. Name three goods or services with highly inelastic price elasticity of supply.
How well do punches of market satisfy properties of ideal money (durable, portable, divisible, uniform quantity, low opportunity cost, stable value)?
A channel of distribution: A) is any series of firms or individuals who participate in the flow of goods and services from producer to consumer or final user. B) is only needed when products must be stored. C) must include one or more intermediarie..
Analyze each macroeconomic model discussed in Chapter 13 to determine which model you believe is viable across the greatest number of economic situations. Explain your rationale.
1. the difference between a perfectly competitive firm and a monopolistically competitive firm is that a
Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000-200P where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard..
The government is considering increasing the tax on gasoline by $3 per gallon and has asked you to determine the impact on Janet's consumer surplus. Janet spends 5% of her income on gasoline and her utility function is Cobb-Douglas.
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