What is intertemporal comparative advantage?
What will be an ideal response?
Intertemporal comparative advantage arises when a country can produce goods for future consumption at a relatively low cost in terms of current consumption. Such a country can import investments (loans) from other countries with intertemporal comparative disadvantages at terms of trade that benefit both countries.
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To determine whether the goal of stable prices is being achieved, the Federal Reserve monitors the ________; to determine whether the goal of maximum employment is being achieved, the Federal Reserve monitors ________
A) GDP price deflator; real GDP B) core PCE deflator inflation rate; the output gap C) core CPI inflation rate; the natural unemployment rate D) CPI; the gap between nominal GDP and real GDP E) core GDP deflator inflation rate; the natural unemployment rate
What is the deadweight loss due to profit-maximizing monopoly pricing under the following conditions: The price charged for goods produced is $10 . The intersection of the marginal revenue and marginal cost curves occurs where output is 100 units and
marginal revenue is $5 . The socially efficient level of production is 110 units. The demand curve is linear and downward sloping, and the marginal cost curve is constant.
In econometrics, simultaneity arises when:
A. strictly exogenous explanatory variables determine the dependent variable through a step-by-step process. B. the error term is correlated with both the dependent variable and explanatory variables. C. one or more of the explanatory variables is jointly determined with the dependent variable. D. both serial correlation and heteroskedasticity are present in an hypothesized model.
Describe three arguments of why some economists object to the predictions of the rational expectations theory and do not subscribe to the conclusions of this approach.
What will be an ideal response?