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?

The U.S. (Home country) and Japan (Foreign country) are trading with each other in the auto industry. Both are large countries in this market for cars. The U.S. imports cars from Japan.

The U.S. demand curve for cars is given by:             D =210 – 30P

The U.S. supply curve for cars is given by:        S = 30+ 30P

Japan’s demand curve for cars is given by:        D* = 50 – 10P

Japan’s supply curve for cars is given by:           S* = 30 + 10P

Answer the following questions.

The U.S. imposes a tariff of $1.50 per unit on car imports.

1. Compute the new world price of cars.
2. Compute the new domestic price of cars (tariff inclusive price of cars) in the U.S.
3. After the tariff is imposed, compute the new quantities of supply, demand, and imports for the U.S.
4. After the tariff is imposed, compute the new quantities of supply, demand, and exports for Japan.

Why would a firm research the marketing infrastructure of a foreign market prior to entry?
a. To quantify the potential demand for the firm's products or services.

b. To determine whether its prices will be competitive.

c.Marketing infrastructure is more of a concern of the local partner so research ahead of market entry would generally not be required.

d.To better understand the wholesale and retail sectors, local marketing regulations, and distribution options.

e. Primarily to understand the role of the media including TV, print, and Internet.

Why does economic development often coincide with rapid rural -urban migration? Discuss the problems to development created by rapid rural-urban migration

A monopolist faces 300 customers divided into 3 different groups:

1. High-Demand customers each have a demand function given by

Q_H = 18 - P.

2. Medium-Demand customers each have a demand function given by

Q_M = 16 - P.

3. Low-Demand customers each have a demand function given by

Q_L = 14 - P.

There are 100 customers of each type (N_H=N_M=N_L=100).

The marginal cost of producing (one unit of) the product the firm is selling is constant at MC = $4. There is no fixed cost.

1. Determine the optimal two-part tariff for this firm and the resulting profits (it can only select one two-part tariff that is applied to all customers).

2. Do the same for N_H=N_L=50 and N_M=200. Explain briefly the difference between the results in (1) and (2).

1. At the current level of output, suppose the actual price level is less than the price level that individuals expect (i.e., Pt < Pet).

We know that:

A. output is currently below the natural level of output.

B. the interest rate will tend to rise as the economy adjusts to this situation.

C. the nominal wage will tend to increase as individuals revise their expectations of the price level.

D. any subsequent reduction in the aggregate price level will cause an increase in the real money supply and a rightward shift in the aggregate demand curve.

E.none of the above

2. Suppose the minimum wage increases. Given this event, we would expect which of the following to occur?

A. no change in the real wage in the medium run

B. an increase in the aggregate price level as output decreases

C. an increase in the interest rate in the short run

D. all of the above

Identify a major national economic problem that needs fixing. Consider how you would measure the relative success of any measure(s) to fix the problem you identified (e.g., more people being put to work, higher household income, fewer people under the poverty level, increased GDP, greater economic growth, higher overall math/science achievement among high school students, lower pollution, etc. - MAKE SURE you come up with a few of your own measures!). Now, propose fiscal and/or monetary policies to fix the problem you've identified and explain IN DETAIL how you believe your policy recommendations would remedy the problem you identified AND how you would measure the relative success of YOUR economic policy recommendations.150-200 words

A university is trying to determine what price to charge for tickets to football games. At a price of ​$22 per​ ticket, attendance averages 40,000 people per game. Every decrease of ​$22 adds 10,000 people to the average number. Every person at the game spends an average of ​$3.00 on concessions. What price per ticket should be charged in order to maximize​ revenue? How many people will attend at that​ price?