8. Refer to Figure 7-2. Which area represents consumer surplus at a price of P2? 9. Refer to Table 5-2. Which of the three supply curves represents
September 3, 2020
If the nominal GDP is $559 billion in the base year, and it rises to 577 in year 1, and 605 in year 2, what is the real GDP in each year, given that
September 3, 2020
  1. In your own words, explain interest rate parity. Do we observe interest rate parity in the real-world data (e.g. between Canada and the United States)?  Why or why not?

Explain how the relation between the real exchange rate and net exports explains the downward slope of the demand curve for foreign-currency exchange.

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