Questions and Answers of Economics Today The Macro View

1.I’ve heard that globalization is bad for U.S. workers. After all, can’t globalization lead to a lot of Americans losing their jobs to people in other countries?
1.• Why does Elizabeth’s customer service call connect to a person in India?
1.• Does everyone agree as to what the benefits and costs of globalization are?
1.• Will globalization lead to some people losing jobs?
1.• What is globalization and does it hurt the poor?
1.6 Why does the balance of payments always equal zero?
1.5 If the current account is $45 billion, the capital account is $55 billion, and the official reserve balance is $1 billion, what does the statistical discrepancy equal?
1.4 If $1 equals 31 rubles, then what does 1 ruble equal?
1.3 If $1 equals 7.7 krone (Danish), then what does 1 krone equal?
1.2 If $1 equals 0.0093 yen, then what does 1 yen equal?
1.1 The following foreign exchange information appeared in a newspaper:a Between Thursday and Friday, did the U.S. dollar appreciate or depreciate against the Russian ruble?b Between Thursday and
1.10 If everyone in the world spoke the same language, would the world be closer to or further from being an optimal currency area? Explain your answer.
1.9 Suppose the price of a Big Mac always rises by the percentage rise in the price level of the country in which it is sold. According to the purchasing power parity(PPP) theory, we would expect the
1.8 Suppose your objective is to predict whether the euro(the currency of the European Union) and the U.S.dollar will appreciate or depreciate on the foreign exchange market in the next two months.
1.7 Every nation’s balance of payments equals zero. Does it follow that each nation is on an equal footing in international trade and finance with every other nation?Explain your answer.
1.6 Individuals do not keep a written account of their balance of trade with other individuals. For example, John doesn’t keep an account of how much he sells to Alice and how much he buys from
1.5 What are the strong and weak points of the flexible exchange rate system? What are the strong and weak points of the fixed exchange rate system?
1.4 Suppose Canada has a merchandise trade deficit and Mexico has a merchandise trade surplus.The two countries have a flexible exchange rate system, so the Mexican peso appreciates and the Canadian
1.3 Suppose the media report that the United States has a deficit in its current account. What does this imply about the U.S. capital account balance and official reserve account balance?
1.2 Give an example that illustrates how a change in the exchange rate changes the relative price of domestic goods in terms of foreign goods.
1.1 Suppose the United States and Japan have a flexible exchange rate system. Explain whether each of the following events will lead to an appreciation or depreciation in the U.S. dollar and Japanese
1.Is anything wrong with the headline that the business columnist wrote?
1.Do big budget deficits really affect as many things as the president’s economic advisor indicates?
1.What does the value of the dollar have to do with Karen’s trip? What does the value of the dollar have to do with Robert Ivans’s business?
1.3. How important is labor mobility in determining whether or not an area is an optimal currency area?
1.2. Country 1 produces good X and country 2 produces good Y. People in both countries begin to demand more of good X and less of good Y. Assume there is no labor mobility between the two countries
1.1. What is an optimal currency area?
1.4. Under a fixed exchange rate system, why might the United States want to devalue its currency?
1.3. In each case, identify whether the U.S. dollar is overvalued or undervalued.a. The fixed exchange rate is $2 1 pound and the equilibrium exchange rate is$3 1 pound.b. The fixed exchange rate
1.1. Under a fixed exchange rate system, if one currency is overvalued, then another currency must be undervalued. Explain why this is true.
1.Why does the Fed play a much larger role under a fixed exchange rate system than under a flexible exchange rate system?
1.3. Suppose the U.S. economy grows while the Swiss economy does not. How will this affect the exchange rate between the dollar and the Swiss franc? Why?
1.Are the demand and supply curves in Exhibit 6 related to the U.S. balance of payments in Exhibit 2?
1.1. If an American retailer buys Japanese cars from a Japanese manufacturer, is this transaction recorded as a debit or a credit? Explain your answer.2. Exports of goods and services equal $200
1.Why does the balance of payments always equal zero?
1.When Americans buy Japanese goods, they supply dollars and demand yen. When the Japanese buy American goods, they supply yen and demand dollars.Thus, the first transaction is recorded as a debit
1.• Do big budget deficits really affect as many things as the president’s economic advisor indicates?
1.• Is anything wrong with the headline that the business columnist wrote?
1.• What does the value of the dollar have to do with Robert Ivans’s business?
1.• What does the value of the dollar have to do with Karen’s trip?
1.2 In the following figure, PW is the world price and PW T is the world price plus a tariff. Identify the following:a The level of imports at PW b The level of imports at PW T c The loss in
1.1 Using the data in the table, answer the following questions:(a) For which good does Canada have a comparative advantage? (b) For which good does Italy have a comparative advantage? (c) What might
1.9 If there is a net loss to society from tariffs, why do tariffs exist?
1.8 Some economists have argued that because domestic consumers gain more from free trade than domestic producers gain from (import) tariffs and quotas, consumers should buy out domestic producers
1.7 Suppose a constitutional convention was called tomorrow, and you were chosen as one of the delegates from your state. You and the other delegates must decide whether it will be constitutional or
1.6 Even though Jeremy is a better gardener and novelist than Bill is, Jeremy still hires Bill as his gardener.Why?
1.4 Suppose the U.S. government wants to curtail imports.Would it be likely to favor a tariff or a quota to accomplish its objective? Why?
1.3 Consider two groups of domestic producers: those that compete with imports and those that export goods.Suppose the domestic producers that compete with imports convince the legislature to impose
1.2 “Whatever can be done by a tariff can be done by a quota.” Discuss.
1.1 Although a production possibilities frontier is usually drawn for a country, one could be drawn for the world.Picture the world’s production possibilities frontier. Is the world positioned at a
1.Is economics nothing more than “good ol’common sense”?
1.How will a tariff help the domestic steel company?
1.4. Outline the details of the infant-industry argument for trade restriction.
1.3. What is a major difference between the effects of a quota and the effects of a tariff?
1.2. Identify the directional change in consumers’ surplus and producers’ surplus when we move from free trade to tariffs. Is the change in consumers’ surplus greater than, less than, or equal
1.1. Who benefits and who loses from tariffs? Explain your answer.
1.1. Suppose the United States can produce 120 units of X at an opportunity cost of 20 units of Y, and Great Britain can produce 40 units of X at an opportunity cost of 80 units of Y. Identify
1.Specialization and trade appear to allow a country’s inhabitants to consume at a level beyond its production possibilities frontier. Is this correct?
1.• Is economics nothing more than“good ol’ common sense”?
1.• Do increased numbers of immigrants lower wages?
1.• How will a tariff help the domestic steel company?
1.3 In part (a) of the following figure, the distribution of voters is skewed to the left; in part (b), the distribution of voters is skewed neither left nor right; and in part(c), the distribution
1.2 Look back at Exhibit 2. Suppose net benefits and net costs for each person are known a week before Election Day, and it is legal to buy and sell votes. Furthermore, suppose there is no conscience
1.1 Suppose there are three major candidates, A, B, and C, running for president of the United States, and the distribution of voters is the same as shown in Exhibit 1.Two of the candidates, A and B,
1.11 Rent seeking may be rational from the individual’s perspective, but it is not rational from society’s perspective.Do you agree or disagree? Explain your answer.
1.10 Evaluate each of the following proposals for reform in terms of the material discussed in this chapter: (a) linking all spending programs to visible tax hikes; (b) a balanced budget amendment
1.9 Some individuals see national defense spending as benefiting special interests—in particular, the defense industry.Others see it as directly benefiting not only the defense industry but the
1.8 What are some ways of making government bureaucrats and bureaus more cost conscious?
1.7 Provide a numerical example that shows simple majority voting may be consistent with efficiency. Next, provide a numerical example that shows simple majority voting may be inconsistent with
1.6 What are some ways of reducing the cost of voting to voters?
1.5 It has often been remarked that Democrat candidates are more liberal in Democrat primaries and Republican candidates are more conservative in Republican primaries than either is in the general
1.4 If the model of politics and government presented in this chapter is true, what are some of the things we would expect to see?
1.3 Many individuals learn more about the car they are thinking of buying than about the candidates running for president of the United States. Explain why.
1.2 Would voters have a greater incentive to vote in an election in which there were only a few registered voters or in one in which there were many registered voters?Why?
1.1 Some observers maintain that not all politicians move toward the middle of the political spectrum to obtain votes. They often cite Barry Goldwater in the 1964 presidential election and George
1.Why don’t more students know the names of their U.S.senators?
1.Why isn’t there much difference between the two candidates?
1.This description makes it sound as if government bureaucrats are petty, selfish people. Aren’t many government bureaucrats nice, considerate people who work hard at their jobs?
1.4. Why is rent-seeking activity socially wasteful?
1.3. Give an example of public interest talk spoken by a special interest group.
1.2. Consider a piece of special interest legislation that will transfer $40 million from group A to group B, where group B includes 10,000 persons. Is this piece of special interest legislation more
1.1. The “average” farmer is likely to be better informed about federal agricultural policy than the “average” food consumer is. Why?
1.Is special interest legislation necessarily bad legislation? Can’t legislation proposed and lobbied for by a special interest group benefit not only the special interest group (directly) but also
1.2. In Example 2 with equal taxes, did the outcome of the vote make anyone worse off? If so, who and by how much?
1.1. If the MSC in Example 2 had been $580 instead of $360, what would the socially optimal, or efficient, outcome have been?
1.3. Would bad weather be something that could affect the voter turnout? Explain your answer.
1.2. Voters often criticize politicians running for office who do not speak in specific terms (tell them what spending programs will be cut, whose taxes will be raised, etc.). If voters want
1.1. If a politician running for office does not speak in general terms, does not try to move to the middle of the political spectrum, and does not take polls, does it follow that the median voter
1.Earlier it was said that politicians move toward the middle of the political spectrum to increase the probability that they will win an election. Now it turns out that the voter in the middle of
1.Some people talk as if government is made up exclusively of good and giving people who have only the public good in mind. Other people talk as if government is made up exclusively of bad and
1.• Why don’t more students know the names of their U.S. senators?
1.• What explains the low voter turnout?
1.• Why isn’t there much difference between the two candidates?
1.3 Using the following data, prove that pollution permits that can be bought and sold can reduce pollution from 12 units to 6 units at lower cost than a regulation that specifies each of the three
1.2 Graphically represent (a) a corrective tax that achieves the socially optimal output and (b) one that moves the market output further away from the socially optimal output than was the case
1.1 Graphically portray (a) a negative externality and (b) a positive externality.
1.11 Identify each of the following as an adverse selection or a moral hazard problem.a A person with car insurance fails to lock his car doors when he shops at a mall.b A person with a family
1.10 Why is it cheaper to reduce, say, air pollution through market environmentalism than through government standards and regulations?
1.9 Economists sometimes shock noneconomists by stating that they do not favor the complete elimination of pollution.Explain the rationale for this position.
1.8 One view is that life is one big externality. Just about everything that someone does affects someone else either positively or negatively.To permit government to deal with externality problems

Showing 400 - 500 of 1465