1) Describe how each of the following factors might explain why PPP is a better guide for exchange rate movements in the long run versus the short run: (i) transactions costs, (ii) nontraded goods, (iii) imperfect competition, (iv) price stickiness. As markets become increasingly integrated, do you suspect PPP will become a more useful guide in the future? Why or why not? 2) Consider two countries: Japan and South Korea. In 1996 Japan experienced relatively slow output growth (1%), whereas South Korea had relatively robust output growth (6%). Suppose the Bank of Japan allowed the money supply to grow by 2% each year, while the Bank of Korea chose to maintain relatively high money growth of 15% per year. In addition, the bank deposits in Japan pay a 3% interest rate, i = 3%. This question uses the general monetary model, where L is no longer assumed constant and money demand is inversely related to the nominal interest rate. You will find it easiest to treat South Korea as the home country and Japan as the foreign country. a. Compute the interest rate paid on South Korean won deposits. b. Using the definition of the real interest rate (nominal interest rate adjusted for inflation), show that the real interest rate in South Korea is equal to the real interest rate in Japan. c. Suppose the Bank of Korea decreases the money growth rate from 15% to 12% and the inflation rate falls proportionately (one for one) with this increase. If the nominal interest rate in Japan remains unchanged, what happens to the interest rate paid on Korean won deposits? d. Using time series diagrams, illustrate how this decrease in the money growth rate affects the money supply MK; South Korea's interest rate; prices P✓ ; real money supply; and Ewon/ over time. (Plot each variable on the vertical axis and time on the horizontal axis.)

"Macroeconomic policies that keep interest rates low encourage efficient economic investment in ideas and capital goods that enhance our society's economic future." Propose and argue in favor of an interest rate policy that addresses both equity and efficiency goals. for the statement above. Make an effective economic argument consisting of (i) at least one normative statement or economic value statement that makes your position clear bolstered by (ii) at least three positive or factual statements.

Choose the following option: Q#3)  Consider the U.S. economy during two historical periods. The first is from              1870 to 1980 – the era of integrated steel and car production, with coal mines,                        steel mills and car factories.  The second is from 1980 until today – 2020 – the             era of computing and biotechnology, with software, artificial intelligence and           lab research.  A major shift in the sources of labor productivity growth occurred            that reflect a greater emphasis on:  (a)  tangible physical capital          (b)  intangible knowledge capital    Q#4)  Consider a poor country with an under-developed economy which could invest        trillions into its current capital stock – either moving “up” its current productivity              “curve” (PC) or shifting to a new and higher productivity (PC) curve.  Which        approach is likely best for increasing the country’s living standards (Real GDP         Per Person) through time?…

1 Answer the following questions: Your hard work was rewarded by a bonus payment of RMB 7000 from your employer. You decided to spend the entire RMB 7000 on buying a new Huawei cellphone although you have a less preferred option of going to Guangzhou for a short trip by spending RMB 5000. Is there an actual (explicit) cost of getting the Huawei phone? What is the opportunity cost concemned - RMB 0, RMB 5000 or RMB 7000? Explain your answer. [Hint: By explicit cost, consider if any money comes from your own pocket] If the decision to buy the cellphone remains valid, but there has been no bonus payment and you have to pay for the phone with your own money. Will the opportunity cost be different from your answer in part a.? Explain. You made a RMB 1000 deposit in your Piggy bank on getting a new iPhone priced at RMB 9000 (i.e. RMB 8000 has yet to be paid to get the phone) which you thought was totally worth it. Before completing the transaction, you came to realize that a new Huawei…

a. Define the gravity model. Specify the variables utilised. b. Apply the gravity model to India and China. Why has it taken so long for India and China to become serious trading partners? Think of 18th century trade patterns, importation of raw materials back to the UK from their colonies. c. Apply the gravity model to the UK in the year 2021. What countries are most important to the UK’s trade relationships?

Answer the following questions:   1) What is the production possibilities frontier?   2) Why do economists use models?   3) How does a society benefit from the production of capital goods?   4) What is the opportunity cost to the society of investing in the capital?   5) Why do economists consider the bowed production possibilities curve to be more realistic?   6) How can societies achieve economic growth?

The data in the table below are for the small country of Xanadu. Assume that the economy is originally producing combination C. F Capital Goods Capital Goods 2 Consumer Goods A 0 125 B 10 100 C 14 75 D 18 50 E 20 25 21 8 a. A technological change occurs that enables Xanadu to produce 40% more units of capital goods. Complete the row Capital Goods 2, in the table above, given this technological change. Enter your responses, both above and below, rounded to 1 decimal place. more capital goods as a b. Assuming the economy wants to continue with the same quantity of consumer goods, it can have result of the technological improvement. c. Assuming the economy wants to continue with the same quantity of capital goods, it can have result of the technological improvement. d. Before the technological change, the opportunity cost of the first 100 consumer goods was e. After the technological change, the opportunity cost of the first 100 consumer goods is more consumer goods as a (Click to…

Can you confirm that I am correct with these positive and normative statements: Positive statement: When oil production slows in Texas, employment and tax revenues decline, and budget cuts at the state and local levels often follow. (Craymer has estimated that the state loses $85 million per year for every $1 decrease in oil prices.) Normative statement:If Russia agrees to production cuts and COVID-19 goes dormant in the hot summer months, as some experts expect, Texas’ coffers will have time to recover before lawmakers convene in 2021 to write a new budget. Or would this be a normative statement:Experts said Texas is better positioned to handle an oil price collapse today thanks to a diversified economy. The last collapse in oil prices, in 2014, also forced the industry to cut costs and otherwise become more efficient. But University of Texas at Austin energy resources professor Michael Webber said COVID-19 throws an unprecedented economic variable into the mix.

Suppose Congress cuts spending for the military, and then unemployment rises in the Philippine defense industry. Is there causation in this situation, or are we observing an association between events?

Can someone help me with this?