kk6037108

Question 2: 

Exchange rates and interest rates are important for macroeconomic decision making. 

1. How does an increase in Japan’s government budget deficit affect each of the following? 

1. The real interest rate in the short run in Japan. Explain. 
2. (Private domestic investment in plant and equipment in Japan 

1. Draw a correctly labeled graph of the foreign exchange market for the euro, and show the effect of the change in the real interest rate in Japan from part (a)(i) on each of the following. 

1. Supply of euros. Explain. 
2. Yen price of the euro 

1. To reverse the change in the yen price of the euro identified in part (b)(ii), should the European Central Bank buy or sell euros in the foreign exchange market? 

Discuss the economics of transport-cost minimization. Be sure to explain the concept of a dominant ideal weight. Consider the economic history of location changes in the iron and steel industry as an application of this theory.

Which of the production possibility information shown in the tables below embodies the principle of rising trade-off?

A.

History of Economics

40 100

60 90

80 70

B.

History of Economics

40 100

60 80

80 60

C.

History of Economics

40 100

60 80

80 70

D.

History of Economics

40 70

60 90

80 100

Economics hw

What is ethics?