Principles of Macroeconomics 2e
2nd Edition
ISBN: 9781947172388
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 16, Problem 28CTQ
We learned that changes in exchange rates and the corresponding changes in the
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Not use ai please
Respond to Luis Rodriguez
I recommend Mrs. Ibrahim's proposal to lower interest rates as the more effective approach for fostering economic growth in Sudan.
Sustainable Growth - Lowering interest rates encourages investment in productive capacity, which can lead to long-term economic growth rather than a temporary boost from cash transfers.
Job Creation - This approach can create more stable employment opportunities by promoting business expansion through lower borrowing costs.
Addressing Structural Issues - Lower interest rates can help address underlying structural issues in the economy, such as low production levels, by incentivizing businesses to invest in technology and infrastructure.
Inflation Control - While there is a risk of inflation if appropriately managed, focusing on productive investments can help mitigate this risk compared to the potential inflationary effects of direct cash transfers.
In conclusion, while both proposals have merit, Mrs. Ibrahim's approach of…
Chapter 16 Solutions
Principles of Macroeconomics 2e
Ch. 16 - How will a stronger euro affect the following...Ch. 16 - Suppose that political unrest in Egypt leads...Ch. 16 - Suppose U.S. interest rates decline compared to...Ch. 16 - Suppose Argentina gets inflation under control and...Ch. 16 - This chapter has explained that one of the most...Ch. 16 - A booming economy can attract financial capital...Ch. 16 - How would a contractionary monetary policy affect...Ch. 16 - A central bank can allow its currency to fall...Ch. 16 - Is a country for which imports and exports...Ch. 16 - What is the foreign exchange market?
Ch. 16 - Describe some buyers and some sellers in the...Ch. 16 - What is the difference between foreign direct...Ch. 16 - What does it mean to hedge a financial...Ch. 16 - What does it mean to say that a currency...Ch. 16 - Does an expectation of a stronger exchange rate in...Ch. 16 - Does a higher rate of return in a nations economy,...Ch. 16 - Does a higher inflation rate in an economy, other...Ch. 16 - What is the purchasing power parity exchange rate?Ch. 16 - What are some of the reasons a central bank is...Ch. 16 - How can an unexpected fall in exchange rates...Ch. 16 - What is the difference between a floating exchange...Ch. 16 - List some advantages and disadvantages of the...Ch. 16 - Why would a nation dollarize—that is, adopt...Ch. 16 - Can you think of any major disadvantages to...Ch. 16 - If a countrys currency is expected to appreciate...Ch. 16 - Do you think that a country experiencing...Ch. 16 - Suppose a country has an overall balance of trade...Ch. 16 - We learned that changes in exchange rates and the...Ch. 16 - If a developing country needs foreign capital...Ch. 16 - Many developing countries, like Mexico, have...Ch. 16 - What would make a country decide to change from a...Ch. 16 - A British pound cost 2.00 in U.S. dollars in 2008,...
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- Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. 100 90 80 70 COSTS (Dollars per pound) 8 50 40 ຊ 20 10, 10 10 + MC ATC AVC Π 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) (?)arrow_forward3. Uncle Mateo loves shoes and high unemployment. Uncle Mateo owns a small shoe factory in Argentina. His business is doing fairly well, especially because prices in Argentina have been falling, including the cost of labor too, since August of 2024. The date is September 1, 2024, and uncle Mateo texted you the following message in an effort to seek your advice about a new policy the government there is intending to implement to deal with high unemployment rates that started to creep up in early 2024: "Hola (hello) dear niece, As you know, prices in Argentina have been falling recently, which is great because I can now hire more people and buy material cheaper than I used to. Also, I was able to find more workers at lower pay because this unemployment rate has been rising. However, some crazy government people want to change things. I don’t know exactly how their ideas will affect me in the long run, but I am worried. They basically want to lower the unemployment rate, and I might have…arrow_forwardNot use ai pleasearrow_forward
- 2. Every time we start to have fun, the government ruins it! You run a construction company where you build residential homes. For the past 3 years, demand for new homes has risen significantly, and your company tripled its size. The main driver for the rise in demand is high GDP growth. People are making good incomes, and they are demanding more houses. The positive outlook many people have about the economy makes you believe that you need to expand your business even further to another state, which requires you to open an office there and hire at least 50 people. While sitting with your family in the evening enjoying some sweets and watching TV, you heard the news reporter state the following: "The central bank has decided to raise interest rates to influence consumer spending to try to control inflation. The economy has been doing very well for 3 consecutive years, and economic growth is still accelerating, which could lead to a spike in prices." Your spouse, who was watching TV…arrow_forward1. You only need to speak 400 languages in Sudan! Sudan, a country rich in culture and natural resources, is in the northeastern part of the continent of Africa. Sudan has more than 500 distinct ethnic groups and over 400 languages. According to the International Monetary Fund, GDP growth rate in Sudan was negative 4.2% (-4.2%) as of April of 2024. Two politicians came forward and proposed different ways to solve the GDP negative growth and to achieve full employment. They are Mr. Abdul and Mrs. Ibrahim. Mr. Abdul’s proposal is this: Because people don’t have money to spend, let’s give them $5,000 each. This way they can have what they need and improve their standard of living. Their demand for goods and services will then stimulate production and, thus, the demand for labor, leading to a lower unemployment rate. Mrs. Ibrahim’s proposal is this: Because production in the economy is low, leading to a decline in GDP, let’s lower the interest rate so people will borrow more money to…arrow_forwardYou are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group s elasticity of demand is while group s is Your marginal cost of producing the product is $ a Determine your optimal markups and prices under thirddegree price discrimination. b Identify the conditions under which thirddegree price discrimination enhances profits.arrow_forward
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