1.. Comment on a situation where the following statement does not hold:

In countries with autocratic regimes, MNEs can manage political risk effectively by focusing solely on their relationships with the government.

2. Comment on why the following statement is false. Provide an example

Increasing Intellectual property laws always stimulate innovation and emerging country-catch up.

3.How do MNEs decide on their product/service offering if they are faced with large cultural distance between them and the host-country? What did Starbucks do when they entered to Italy?

4. List indices/rankings that MNEs can use in their investment decisions. Choose 2 mini presentations, Comment on which ones are more relevant vs. less relevant to those 2 mini-team presentations.

Sandra has the following preferences over cookies (x) and tea (y) u(x, y) = min(4x, 2y)

(a) Are Sandra’s preferences complete, transitive, and continuous? Explain/Prove your answer and state the definitions for completeness, transitivity, and continuity. (6 points) 4

(b) Are Sandra’s preferences monotone? If yes, are they strongly monotone or weakly monotone? Define weak and strong monotonicity and then prove your answer. (5 points)

(c) Are Sandra’s preferences strictly convex? Prove your answer (3 points) 5

(d) Graph Sandra’s indifference curves that go through points (2,2), (4,4), (6,6), (8,8). Be sure to label the axis and the utility levels of the indifference curves. (Hint: You should be graphing 4 indifference curves) (5 points)

explain how can different personality attributes shape policy decisions by different leaders?

Use a two country supply and demand diagram to illustrate how, starting from completely free trade, a tariff on wool blankets affects both the domestic and foreign markets for blankets. Label the important geometric areas in your diagram and explain how the tariff changes the consumer and producer surpluses in both countries as well as the well-being of other relevant groups.

Discuss the benefits and costs of FDI from the perspective of a host country and from the perspective of the home country. Describe some of the home country policies that encourage outward FDI. What are the ways in which host governments restrict inward FDI?

Please show work and use the actual equations, not excel ones.

An RV manufacturer estimates that annual profits will increase if a mobile model is built and taken to trade shows to market their product line. A finance and engineering team has looked at the issue and has developed to options:

1.) A large model can be developed at a cost of $75,000, and it should increase annual profits by $25,000 per year.

2.) A small model can be developed for $40,000, but it will only increase annual profits by $14,500 per year.

The salvage value for the large model is $6000 more than the small model after their common useful life of 6 years, and it costs $1,500 more a year to transport to the trade shows. The manufacturer uses an interest rate of %18. Use an annual worth comparison to make a recommendation on which, if either, option should be chosen.

List and Explain the three tools the Fed has at its disposal to change the money supply and therefore change interest rates.

The bank of Jamaica states that inflation is under control in the country.

1. Discuss the concept of inflation and identify its relationship if any to unemployment/employment.
     
2. Assess the ability of the central bank to control inflation.

You need to obtain the country-level data for Argentina and El Salvador on:

i. Imports of goods and services (in current US$)

ii. Exports of goods and services (in current US$)

iii. GDP (in current US$)

iv. GDP per capita (in current US$)

v. GINI Index (World Bank estimate) from the World Bank's World Development Indicators.

Q1. Using trade flows in your data, calculate openness as a percentage for Argentina and El Salvador and present them for each year for both countries as a table. You need to explain your method, namely, how you calculated openness using trade flows (write down the formula). In addition, you need to state what other alternative ways you could have adopted to calculate openness other than using trade flows.

Q2. Using the calculations you did for openness in Step 1, plot openness (as a percentage) against time (1998-2014) for both countries (Argentina and El Salvador) in a single graph (as a chart type: you are required to use line graph). Put openness (as a percentage) on the vertical axis and time on the horizontal axis. Explain and compare briefly how openness changes for these countries over time. Make sure you limit your explanation to 200 words.

1. Suppose that you are interested how education effects fertility decisions of women.

a. Carefully describe the simple linear regression model relating fertility to education. You will have to define variables denoting the number of children ever born to a woman, and denoting years of education for the woman. [3 points]
b. What are some of the other determinants of fertility decisions? Are these likely to be correlated with the education? Explain how. [3 points]
c. Will your linear model in part a recover the causal effect of education on fertility decisions of a woman? [3 points]

1. List and explain the different approaches to the trade cycle.
2. Which one do you find more helpful explaining the trade cycle? Why?
3. Pick one of the 16 points from the Austrian theory of the trade cycle and relate it to recent economic events in the macro economy.
4. What difference could this information make when you apply them to your daily life and career?

Determine whether the statements below indicate the market is perfectly competitive or monopolistically competitive.

1. Firm A is one of many firms in the industry producing the exact same product as their competitors.

• Perfectly Competitive

• Monopolistically Competitive

2. Firm B charges the market price for their product after unsuccessfully trying to increase it.

• Monopolistically Competitive

• Perfectly Competitive

3. Firm C offers a product that is faster than their competitors allowing them to charge a higher price.

• Perfectly Competitive

• Monopolistically Competitive

Question 1

Explain, in words and on a graph, how a fiscal stimulus works in a Mundell-Fleming model with a fixed exchange rate. Is this effective fiscal stimulus policy?

Question 2:

Explain, in words and on a graph, how a fiscal stimulus works in a Mundell-Fleming model with a floating exchange rate. Is this effective fiscal stimulus policy?