Explain how exchange rates are determined under the fixed exchange rate system. Then, thoroughly discuss the advantages and disadvantages of the fixed exchange rate system.

Explain how exchange rates are determined under a floating exchange rate system. Then, thoroughly discuss the advantages and disadvantages of each system.

Explain how exchange rates are determined under a pegged exchange rate system. Then thoroughly discuss the advantages and disadvantages of a pegged exchange rate system.

4.In an open economy, trade is allowed between countries. Assume a consumer purchases $1,000 worth of furniture manufactured in China. Answer the following:

a. Which component(s) of GDP are impacted by this purchase?

b. Does GDP increase, decrease or stay the same? Briefly explain.

c. Does your answer change if the company in China is a U.S. owned company? Why?

Globalization has impacts on the performance of the economies of countries due to various reasons. Consider the case of international trade. It has been argued that the gains from trade are based on comparative advantages, which reflect the relative opportunity costs of production. When countries specialize in producing goods and services for which they have comparative advantages, total production in the global economy rises. Trade advocates argue that this increase in the size of the economic pie can be used to make all trading countries better off through international trade. Economists also use the principle of comparative advantage to advocate free trade among countries as a better policy.

There is also an issue of trade balance. A balance of trade is the difference between the monetary value of exports and imports of a country. Trade balance can be positive (favorable) when the value of exports is greater than the value of imports. The positive trade balance is also called trade surplus. On the contrary, if the value of imports is greater than the value of exports, the trade balance indicates trade deficit (negative net export).

a. Does free trade contribute to the improvement of economic well-being in the U.S. economy? How does trade stimulate long-term economic growth? Explain. How do the gains compare to the losses? Explain using examples. What is the impact of free trade on domestic job creation policy? Elaborate with examples.

b. Do you think the U.S. exports and imports of goods and services are based on the principle of comparative advantage of trade? Explain. Why do countries impose trade restrictions on goods and services they import from other countries? What are the pros and cons of trade protectionism like tariffs on the U.S. economy?

c. What are the impacts of currency devaluation and revaluation on the international trade? What is currency (exchange rate) war? How does it affect trade between countries? What are the impacts of currency manipulations on the U.S. trade?

Definition 1 Consider the linear model y = XB + e, E(e) = 0, X ( R"XP, BE RP. A vector value linear function of B, say AB, is estimable if ATB = PT XB for all B E RP, for some matrix P. Notation Throughout if A is matrix C(A) denotes its column space. 1. Consider the data: Y, = Bo + B1 + e; where e1, . ... en are uncorrelated errors with mean zero and variance o?. (a) (.5 pts) Write this model in the form Y = XB + e with 3 = (30, B,). Specify the matrix X. (b) (.5 pts) Write down the normal equations. Find a solution to them. Is the solution unique? (c) (.5 pts) What is the least squares estimate of Bo + Bi? (d) (.5 pts) Is B, estimable? (e) (.5 pts) Consider now another observation Yn+1 = Bo + 281 + en+1 where e1, . . .; en+1 are uncorrelated errors with mean zero and variance o'. Write this model in the form Y = XB+e and calculate the least squares estimate of B.Question 5 Economists face an obstacle that many other scientists do not face. What is that obstacle? It is often difficult to formulate theories in economics, It is often impractical to perform experiments in economics, The scientific method cannot be applied to the study of economics. @ Economics cannot be addressed objectively; it must be addressed subjectively.QUESTION 9 According to the Social Contract Theory, an action is morally right if QUESTION 10 Most people who adhere to the Social Contract Theory also agree with Egoism. O True O False QUESTION 11 The Prisoner's Dilemma attempts to show QUESTION 12 The Social Contract Theory is similar to Cultural Relativism because: They both think morality is based on majority opinion O They both think morality is just a way for society to function better O They both think there are no exceptions to the rules O They both think nobody can be wrong about morality Click Save and Submit to save and submit. Click Save All Answers to save all answers.QUESTION 3 In 2 paragraphs, state two criticisms of social contract theory and articulate what they find problematic about social contract theory. T T I Ariel - \"snap\" T v : Path: p Suppose we have a numeric variable as a predictor variable (e.g., bank account balance). Which of the following types of analyses might be appropriate when you have a numeric predictor? O ANOVA O regression O correlation O t-test O the general linear model Question 2 2 pts Which of the following correlation coefficients are valid and show the largest association between two variables? O 2.3 0.02 106 O -82