In 1975, wage levels in South Korea were roughly 5% of those in the United States. It is obvious that if the United States had allowed Korean goods to be freely imported into the United States at that time, this would have caused devastation to the standard of living in the United States, because no […]
Date: September 10th, 2020
Describe the environmental Kuznets curve. What will be an ideal response? ANSWER This curve shows the effect of increased per capita income on environmental damage. It has an inverted U shape that indicates that increased per capita income first increases and then decreases environmental damage.
Date: September 10th, 2020
Which of the following is NOT a situation providing a potential advantage for Mexico that makes it competitive compared to China in trade with the United States? A) The product line requires quick turn-around time from or to delivery. B) The need to manage a just-in-time inventory system C) Wages are low and the production […]
Date: September 10th, 2020
An American firm that buys foreign exchange because its managers expect the dollar to depreciate is A) increasing the supply of foreign exchange. B) increasing the demand for foreign exchange. C) speculating. D) Both A and B. E) Both B and C. ANSWER E
Date: September 10th, 2020
Analyze the following statement “the global financial crisis of 2008-2009 was a great illustration of how interdependent national economies are.” What will be an ideal response? ANSWER True. The global financial crisis that started in 2008, although commonly blamed on the U.S. quickly spread to all economies in the world. Although overt global policy […]
Date: September 10th, 2020
Latin American economies have become relatively more closed to international trade since 1985. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
All else equal and given the current system of exchange rates, if the United States enters a period of exceptionally strong growth, A) the pressure on the dollar is to revalue. B) the pressure on the dollar is to devalue. C) the pressure on the dollar is to depreciate. D) the pressure on the dollar […]
Date: September 10th, 2020
National saving minus investment equals the current account. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Present and explain the Fundamental Equation of the Monetary Approach. What will be an ideal response? ANSWER Assume = PUS/PE and that domestic price levels depend on domestic money demands and supplies: PUS = MUSS/L(R$, YUS) PE = MES/L( , YE) Therefore, the exchange rate is fully determined in the long run by the […]
Date: September 10th, 2020
Explain the purpose of the following figure. What will be an ideal response? ANSWER To show that spot and forward exchange rates are in general close to each other.
Date: September 10th, 2020
