ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Consider an OLG economy where each generation has 20 bananas when young, and 12 bananas when old.
Suppose central bank prints out 2 unit of money, give to gen 0 for free. Solve for equilibrium exchange rate “1 money = ??? bananas”.
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- Using th equilibri of the money market and the purchasing power parity What ha if the GDP of the home country (H) decreases? а. The money supply goes up O b. The money supply goes down The exchange rate (EH/F) goes up The exchange rate (EH/F) goes down None of the above е.arrow_forwarda. What is purchasing power parity and how is it related to the law of one price?b. Is it reasonable to suppose that purchasing power parity holds in the long run but not in the short run?arrow_forwardIf Canada is said to have a balance of payments deficit,this means thatOA.the Bank of Canada decreased its reserves of foreign exchangeB.theBank of Canada purchased some ofthe gold that it uses to back the Canadian dollarc.theBank of Canada used Canadian dollars to buy foreign exchange on the foreign exchange markets. O D. the Bank of Canada issued foreign exchangearrow_forward
- urgent dont chaptgpt answer Appreciation of the real exchange rate A. makes U.S. exports less expensive to foreigners. B. benefits all U.S. producers. C. makesJ.S. exports more expensive to foreigners. makest D. means a basket of U.S. goods would exchange for fewer foreign goods.arrow_forwardPlease state why it’s wrong or uncertain if applicablearrow_forwardConsider avocado trading between you and nber. Your tree grows 100 this year and 10 next year.Nber's tree grows 20 this year and 50 next year.Let the equilibrium exchange rate be v. Consider a different scanerio: Your tree grows 100 this year and 10 next year.Nber's tree grows 20 this year and 60 next year.Let the equilibrium exchange rate be v'. Then v>v'. Hint: you can use your intuition to figure this out without any calculation. A. TrueB. Falsearrow_forward
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