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What effect do non-tradable goods have on PPP?
Answer: The consequence is quite substantial. In 1997 the production of non-tradable goods accounted for about 55% of U.S GNP. Together with haircuts non-tradable goods include housing, routine medical treatment and so on. For the nearly all parts non-tradable goods are comprised of services and the output of the construction industry. Non-tradable assists explain much of the wide departure from PPP that is present in empirical data.
Explain Purchasing Power Parity. Answer: PPP ( ) states that the exchange rate between two countries' currencies equals the ratio of the countries' price levels. A decr
Q. What is the national income identity for a closed economy? Answer: Y = C + I + G.
under fleible exchange rate regime what are the consenquences of current account deficit and surplus
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1. Explain why many Asian countries set up Export Processing Zones and why China set up Special Economic Zones. What are the similarities and differences between EPZs and SEZs?
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define stolper samuelson theorem
Q. Use a figure to study the effects of a change in market belief with regard to the fixed exchange rate, in particular assume market participants expect the government to devaluat
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