1. When investors expect a country’s currency to strengthen in the future this is likely to result in _________________.

Select the correct answer below:

a. immediate appreciation of that currency

b. immediate depreciation of that currency

c. slow, steady appreciation of that currency

d. slow, steady depreciation of that currency

2. Which of the following is an example of a cyclically unemployed person

Select the correct answer below:

a. Mary quit her job to look for a better paying position with a different company

b. Rohit's company outsourced his position to another country and he was laid off. He needs to train to move into a different type of role.

c. Ron has decided to quit his job to become a stay-at-home dad.

d. Mae was laid off due to decrease in orders for her company's products. The economy is slowing down.

3. Assume that the level of domestic investment in a country rises while the level of private and public saving remains unchanged. In this case, the trade deficit would __________

Select the correct answer below:

a. increase

b. decline

4. One reason to demand a currency on the foreign exchange market is __________________________.

Select the correct answer below:

a. the belief that the currency's value is about to decline

b. the belief that the currency's value is about to increase

5. If a national economy runs a trade surplus, the trade sector will involve a(n) ______________ of financial capital.

Select the correct answer below:

a. inflow

b. outflow

c. shortage

d. balance

6. Suppose an economy has a trade surplus of $50 billion, private domestic savings of $500 billion, a government deficit of $120 billion, and private domestic investment of $570 billion. If the trade surplus decrease to $0, then all else equal by how many billions of dollars must private domestic investment have to change? Use a negative sign in your answer if there must be a decrease in private domestic investment.

Recall the savings investment formula: S+(M–X)=I+(G−T)

Provide your answer below:

1. Does future prosperity depend on the development of renewable energy technologies? Why or why not?

Explain the advantages in "Franchising" and "Acquisitions" when corporations pursue international markets?

1. What is the warranty of merchantability?

2. What is the warranty of fitness for a particular purpose?

3. What is a disclaimer?

4. What is the difference between personal property and real property?

5. What is abandonment?

6. What is a bailment?

Assume a nation has an output level of 150 units per year, and that consumption is also 150. Suppose there is a sudden temporary drop in GDP by 16%. What does the long-run consumption path look like if this country has access to global financial markets with an interest rate of 5%?

4. Compare the approaches of Fisher’s transactions and Pigou’s cash balances to the quantity theory. Are there any similarities between them? If so, in which respects? Or should they be treated as different approaches altogether?

Two suppliers have been contracted by a government agency to train agency employees learning to use a new computer system. The marginal cost curve of firm 1 is MC1=160+2Q1, while the marginal cost curve for Firm 2 is MC2=100+Q2, where Q is hours of training per week. Originally, each firm provides 60 hours of training services each week.

What is the total cost to firm 1 of providing 60 hours of training each week?

What is the total cost to firm 2 of providing 60 hours of training each week?

An economically-literate manager suggests it would be better to state a price that the government is willing to pay for an hour of training, and let each firm provide the number of hours they are willing to at this price.

What price should the government set to cost-effectively distribute the number of hours between the two firms while maintaining the total training provided at 120 hours per week?

How many hours of training will firm 1 provide at this price?

What is firm 1’s total cost?

How many hours will firm 2 provide at this price?

What is firm 2’s total cost?

How large is the cost savings resulting from the price rationed system relative to the original allocation of 60 training hours for each firm?

Linda invest 25000 for one year part is invested at 5% another part at 6% and the rest at 8%. the total income from all three investments is $1600. the income from the 5% and 6% investments is the same as the income from the 8% investment. find the amount invested at each rate.

Regional trading blocs, such as the European Union (EU) and NAFTA, are growing in importance. Why do you think this is so - what do countries gain from joining a regional trading bloc? What the implications of these trading blocs for international business? Are they helpful or harmful? How might they affect a firm's investment decision?

What is profit? There is accounting profit discussed in the textbook: profit = total revenues – explicit costs Let me relate profit to the factors of production. The three factors of production according to the textbook are land, labor, and capital. Let me add a fourth factor found in many economics textbooks: a return to the entrepreneur! (Entrepreneurs provide two services to society: organize resources and assume risk.) So how does a firm or entrepreneur maximize its profits? The answer is simple: provide society what it wants. (Note: this may be different from what society needs.) Note: Given this perspective, profit is something inherently good, something to be maximized, not feared. Let’s refine our understanding of this concept. Normal profit is that return necessary to attract and maintain entrepreneurial participation in some economic activity. Economic rent is return greater than normal profit.

Response:

1. Answer the following questions concerning covered and uncovered interest rate differentials and parity conditions:

a. Suppose the spot dollar-euro exchange rate is $1.20/€ , and the 60-day forward rate is $1.24/€. Is the euro selling at a forward discount or premium? What about the dollar?

b. Now suppose the interest rates on one-year U.S. and Eurozone (EMU) bonds are rUS = 5% and rEMU = 3%. You expect that, one year from now, the dollar-euro exchange rate will be at $1.26/€. Today the rate is $1.20/€.  Which should you invest in, the U.S. or EMU bond? Explain Hint use uncovered interest rate parity to get your answer.

c. Suppose the interest rate is 4% in the US and 8% in the UK.  If the actual exchange rate is e = $2.00/£1 (home is the US), what must the expected exchange rate e^e be?

What are external costs? When external costs are present, will market allocation result in too much or too little output of the good relative to the ideal efficiency level?  

​ What is a public good? Provide an example, and explain why it is a public good.

​ What is a public good? Provide an example, and explain why it is a public good.

Typed answers only

NOTE THIS QUESTION HAS SIX ANSWERS. BE CLEAR WITH YOUR ANSWERS BY LABELING EACH ANSWER.

The table above describes the output per hour worker measured as pounds of catfish and pairs of cowboy boots in Arkansas and Tennessee.

​A) Who has the absolute advantage in producing​ Catfish?

​B) For​ Arkansas, the opportunity cost of one more pound of catfish is​ ________ pair of boots.

​C) For​ Arkansas, the opportunity cost of one more pair of boots is​ __________ pounds of catfish.

​D) For​ Tennesseee, the opportunity cost of one more pound of catfish is​ ________ pair of boots.

​E) For​ Tennessee, the opportunity cost of one more pair of boots is​ __________ pounds of catfish.

​F) Who has the comparative advantage in cowboy​ boots?

Consider two individuals with the same income and probability of experiencing an accident that would cost them $15,000 in medical expenses. The first individual has the utility function U=ln(Y) and the second has the utility function U=ln(Y)+10. How would their willingness to pay for an insurance policy to cover all of their medical expenses differ between the two individuals?

A burger establishment such as whataburger sells a burger for $10 but two burgers for $15. Could this reflect difference in costs? Discuss the conditions under which this could be a type of price discrimination. Why might the restaurant require that each person purchase a meal?