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Q. Explain the difference between the following two expressions:
Y = C(Yd) + I + G + CA(EP*/P, Yd) and
Y = C + I +G + CA
Answer: The first expression corresponds to a behavioral equation and thus may express equilibrium conditions for the output market or the aggregate desired demand for output. The second equation is merely an identity that is always true.
Q. An export subsidy has the reverse effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the
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In as much as Sovereign Wealth Funds (SWFs) are established to achieve national objectives, the intentions of the United Arab Emirates -- one of the world's largest -- are open to
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