“There is no point in the United States complaining about trade policies in Japan and Europe. Each country has a right to do whatever is in its own best interest. Instead of complaining about foreign trade policies, the United States should let other countries go their way, and give up our own prejudices about free trade and follow suit.” Discuss fully both the economics and the politically economy of this view point. Use “Prisoner’s Dilemma” as part of the analysis.

a) “According to the long-run classical model, there will be a decrease in the world interest rate and the world level of investment when the aging populations of industrial countries start running down their savings and, at the same time, the investment appetite of emerging economies begins to slow down.” True/False, explain with the aid of one diagram for the world market for loanable funds. (10 points) Note: The world as a whole is a closed economy.

b) A new study shows that the level of total factor productivity increases and, at the same time, the labour force participation rate falls. According to the long run classical model, what happens to the equilibrium levels of the real interest rate, the real rental price of capital, and the real wage? Explain in words and support your answer by using ONE loanable funds market diagram, ONE labour market diagram, and ONE rental market for capital diagram. (15 points)

Please write a paragraph or two for each question:

You are working as a graduate within the engineering department of a manufacturing and consulting focused public listed company. You and your team are working on the post-COVID recovery and how best to allocate capital. Your team has $1,000,000 in capital at their disposal.

The accountants are expected to use terms which may not be fully understood by the greater department. So your memo will be distributed before the call or you may be asked to speak on the call to assist everyone's understanding. The memo should discuss each of the following:

1. A new product line is also being proposed and it is expected that the accountants will discuss this option. Explain the difference between fixed and variable costs and state at least three examples of each that the company may incur.

2. Some employees have raised their concern that the new product line will not be profitable and that it will cost more to produce the new product than will be made. Explain the break even point with particular focus on why a break even point is not immediate but rather is reached over time.

Danny likes to buy books (x₁), and CDs (x₂) with his monthly allowance.

a)     (2) Suppose that books cost $10 each and CDs cost $20 each, and Danny has $200 from his allowance to spend this month. Write down the equation of Danny’s budget line.

b)     (4) Suppose Danny’s utility function is U (x₁, x₂) = 2x₁+ x₂. What can you say about Danny’s preferences for books and CDs. What is Danny’s optimal choice of books and CDs? Show the solution on a graph with the budget line and utility function.

c)     (4) Suppose that additionally Danny’s Mom says that she will buy him 5 books every month. Show how the new budget line (with the gift of 5 books) will look like. What will Danny’s new optimal choice be?

d)     (3) If Danny is able to buy the first 5 books at regular price, all additional books are half price, draw Danny’s new budget line.

The interest rate on 3-year Australia government bonds has been approximately 0.25% since April. Which of the following is the most likely explanation of this near-zero market rate of interest on government bonds?

a. Australia government budget surpluses in recent years.

b. The target cash rate being set at 0.25%.

c. The low level of government debt.

d. Purchases of bonds by the Reserve Bank of Australia on the secondary market.

e. Purchases of bonds by the Reserve Bank of Australia on the primary market.

Suppose you receive the following spot exchange rate quotes from a bank:

AUD/USD 0.65-0.66

You have USD 1,000,000, which you wish to convert into AUD. How many AUD will you be able to purchase?

a. 650,000.

b. 655,000.

c. 1,538,461.

d. 1,515,152.

e. 660,000.

Due to a global economic crisis, the private sector reduces its investment spending and increases its planned saving, so that the private sector financial balance goes from a deficit of 2% of GDP to a surplus of 5% of GDP. The current account balance goes from a surplus of 1% of GDP to a deficit of 2% of GDP. This implies the fiscal balance must go from a ____________ of _________ of GDP to a ___________ of _________ of GDP.

a. surplus; 1%; deficit; 3%.

b. surplus; 3%; deficit; 3%.

c. deficit; 3%; surplus 7%.

d. surplus; 3%; deficit; 7%.

e. deficit; 3%; deficit 7%.

Describe both the costs and benefits of Foreign Direct Investment (FDI) to the home and host countries.

What are the factors of supply

Let C(q) 20 + 4q + 2q2 and demand P(Q) = 212 – 6Q a. Derive the standard monopoly solution b. Derive monopoly profits as a function of the two kinds of taxes: solve for q as a function of the unit tax t and ad valorem tax a. Let t = 6.05 and let a = 0.1. Both taxes generate Q = 12.6 and a resulting consumer price of p = 136.4. Calculate i. Deadweight loss ii. Consumer surplus Producer surplus under the unit taxt Tax revenues under the unit tax t Producer surplus under the ad valorem tax a and compare to undert vi. Tax revenues under the ad valorem tax a and compare to under t

Written Discussion Not everyone chooses to be employed. As the textbook shows, there are a multitude of reasons why people choose (or do not choose) to be unemployed.

Pick one type of worker (or a person you know) who chooses to be unemployed or under-employed and discuss why.

Alternately, you could pick a worker-type who traditionally is not employed and explain why they might choose to work.

Remember to talk about economic theory about unemployment rates (what is U-6?) , supply and demand and what the impact is of those individual employment choices..

Question 2 of 4

Use decimals if needed, not fractions. Do not round at all (without rounding, truncate final answer after three decimal places if needed).

Suppose the demand for union representation is given by R^D=240-4p and the supply of union representation is L^S=2p.

A. Graph the supply and demand for union representation. If union membership is free, the maximum number of workers who would want a union is _______ . If union fees are above $ _______ , zero workers would want to join. In equilibrium, _______ workers will choose to be represented by a union and the fee for being represented by a union will be $ _______ per member.

B. Suppose the government introduces right-to work laws such that workers may receive the benefits of union representation without paying the fees. Some workers who formerly had some willingness to pay for union representation now prefer to be "free riders" on the union services paid by others, and are no longer willing to pay so the demand curve shifts as the aggregate willingness to pay of workers decreases. Suppose the new demand curve is given by L^D=180-4p. Draw this change on your graph. We can interpret this as meaning _________ workers have withdrawn their demand for union representation. As a result, union membership costs $ _______ per worker and _________ workers will choose to be union members.

C. The size of the union ________ (increases/decreases/stays the same) as a result of right-to work laws. The union's total revenue from membership ________ (increases/decreases/stays the same) by $ ________ after the right-to-work laws are introduced.

What exactly is the backbone of an SMS, and why is it so important to the development of a fully functioning SMS? What are the other components? Are they as important as the backbone components of a fully functioning SMS?

In the Great Depression, why did Keynes think about the relative reliability and effectiveness of Fiscal and Monetary policy?

Why do negative externalities, monopoly, and asymmetric information result in bad economic outcomes? What can we do to fix these?