Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Question: During 1983, 1984, and 1985, the dollar was overvalued and kept rising. During that period, real imports rose $160 billion and real exports rose only $27 billion, while real GDP rose an average of 5.1% per year. During the next four years, the dollar declined and returned to equilibrium. Real imports rose $118 billion while real exports rose $188 billion, but the growth rate moderated, rising at an average of 3.6%.

(A) In order to explain the difference in growth rates of the economy during these two periods, what other information would you need?

(B) The turnaround in the dollar occurred when the Fed made a publicly announced decision to reduce the real rate of interest. However, that would ordinarily stimulate domestic demand, yet the figures above indicate that it grew at a slower rate. Why did the economy grow more slowly when the dollar was declining and interest rates were low than when the dollar was rising and interest rates were high?

(C) To what degree was the slower growth in investment during the 1986-9 period directly related to the decline in foreign saving? What other components of saving declined?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93113884

Have any Question? 


Related Questions in Microeconomics

Question in france it takes one worker to produce one

Question: In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine. In Tunisia it takes two workers to produce one sweater, and three workers to produce one bottle of wine. Who h ...

Question the following diagram shows the market situation

Question: The following diagram shows the market situation for the perfectly competitive market for wheat. The wheat market is currently at short-run equilibrium E, where the price P* is not high enough to generate posit ...

Question paper details a 5-7 page including cover and

Question: Paper Details: A 5-7 page (including cover and reference pages so about 3-5 of actual writing) research paper APA style, 12 pt font double spaced. You must cite at least 2 sources that are from peer-reviewed ar ...

Question in spite of the greater emphasis on a planned

Question: In spite of the greater emphasis on a planned economy in France than in Germany, the growth rate in France has averaged more than 1% higher than Germany over the past five years, whereas during the previous fiv ...

Question discuss and analyze the following even though

Question: Discuss, and analyze the following: "Even though fixed costs do not affect the output decision, an increase in fixed costs results in a wider range of prices for which the firm operates at a loss." The response ...

Question suppose the government cuts corporate income taxes

Question: Suppose the government cuts corporate income taxes, hence boosting I. However, S has declined because the deficit has increased. Explain how the economy returns to equilibrium where I = S on an ex post basis. T ...

Question 1 identify and evaluate consequences of government

Question: 1. Identify and evaluate consequences of government price supports and subsidies in U.S. farming markets. 2. Do rent ceiling laws for apartments result in an efficient allocation of apartment units? Why or why ...

Question many retirement funds charge an administrative fee

Question: Many retirement funds charge an administrative fee each year equal to 0.25% on managed assets. Suppose that Alexx and Spenser each invest $5,000 in the same stock this year. Alexx invests directly and earns 5% ...

Question if you were president of a third world country

Question: If you were president of a Third World country which lacked diversity among its political leadership, mention and discuss three policies you would pursue to ensure fair representation of women as decision maker ...

Question the market process the forces that bring us closer

Question: The market process (the forces that bring us closer to equilibrium) is said to solve the knowledge problem. What is the knowledge problem? What aspects of markets help to mitigate the knowledge problem? Provide ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As