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Q. Based on the 1997 Crisis and your own experience, what are the main weaknesses of the East Asian economies? Answer: The limitation is little productivity increases most of
What are the predictions for the long run of the Monetary Approach? Answer: Money supplies- Known the equations
Q. Suppose Australia, a land (K)-abundant country and Sri-Lanka, a labor(L)- abundant country both produce labor and land intensive goods with the similar technology. Following t
Explain why Relative PPP is useful when comparing countries that base their price levels on different product baskets. Answer: For instance If the U.S price level increase by
diagram
can Lesotho afford an independent monetary policy
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Q. Using 4 different figures, plot the time paths showing the effects of a permanent increase in the United States money supply on: A. U.S. money supply. B.
Q. Using the II - XX framework, show using a figure that fiscal policies by themselves cannot bring the economy to both internal and external balances. Answer: Starting at poi
Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affe
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