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Q. Use the diagram below taken from Figure 4-4 to identify the pre-trade situation for Australia and Sri-Lanka. Where on the K/L axis will you search each of the two countries? Which of the two countries has a higher relative wage, w/r? Which product is the labor intensive, and which is the land intensive one? Show where the relative price of cloth to food will be taken once trade opens between these two countries. Show where the relative wages of each will semms. Answer: You will search Sri-Lanka to the left of Australia on the K/L axis. Australia has a elevated relative wage. Food is the land intensive product and the relative price PC/PF is found among the two autarkic prices. The post trade relative wage is among the two autarkic ones on the vertical axis.
Is a depreciation of the dollar/euro exchange rate correlated with a decrease in the dollar return on U.S. deposits? Answer: No, suppose that the Interest Parity is maintained
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To answer the following question, please refer to the figure below.Concentrating only at the lower left quadrant, discuss the relationship between the U.S. real money supply and th
suppose that France has a trade surplus with the united kingdom, what would you expect to happen to price,wages, and commodity price in France? why? what would happen to the terms
wate is the national incom of indi aims & objectives
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