Question
Consider a Ricardian model with money. The output per man hour of good X and good Y are respectively 5 units and 4 units in
Consider a Ricardian model with money. The output per man hour of good X and good Y are respectively 5 units and 4 units in the USA, and 1 unit and 2 units in China. Both economies are perfectly competitive. Assume USD is the accepted international currency.
- Suppose trade between USA and China are prohibited. In the initial autarkic competitive equilibrium, the wages per hour in the USA and China are respectively US$ 1 and CNY 1.
- What are the prices (in US$) of X and Y in the USA?
- What are the prices (in CNY) of X and Y in China?
- How many units of X or Y can workers in the USA purchase per hour of work?
- How many units of X or Y can workers in China purchase per hour of work?
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Financial Accounting Information For Decisions
Authors: Robert w Ingram, Thomas L Albright
6th Edition
9780324313413, 324672705, 324313411, 978-0324672701
