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Q. "No country is abundant in everything." Discuss. Answer: the idea of relative (country) factor abundance is (like factor intensities) a relative concept. When we recogniz
Q. Explain why one can write the demand for money as follows: Md = P L (R, Y) Answer: The collective money demand is proportional to the price level. Imagine that every prices
distinguish between net terms of trade and gross terms of trade
Q. The Metzler Paradox is a special case of the optimum tariff idea. Discuss this assertion. Could the optimum tariff tend to be a high one or a low one in the case where this p
Q. Using a figure, show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run. Answer: A t
how does the buying and selling of stock fit the model for perfect competition
Q. Why is it that North-South trade in manufactures look to be consistent with the results or expectations generated by the factor-proportions theory of international trade, where
Q. What is the theory of Second Best? Answer: The principal of the second best notify us that when an economy suffers from multiple distortions the removal of only a few
Q. In 1986, the price of oil on world markets dropped sharply. Since the United States is an oil-importing country, this was widely regarded as good for the U.S. economy. Yet in
Q. Who are the major participants in the foreign exchange market? Answer: 1. Commercial banks 2. Corporations 3. Nonblank financial institutions 4. Central banks
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