EBK PRINCIPLES OF MACROECONOMICS
8th Edition
ISBN: 8220103611855
Author: Mankiw
Publisher: Cengage Learning US
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Chapter 19.1, Problem 1QQ
To determine
The supply and demand for lonable funds in the foreign exchange market.
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The preferences of a consumer are represented by the following utility function:
U = min (×1, 2x2)
If income is 100 and p1=p2=1
a) What is the optimal bundle?
b) If p₁=4, what is the new optimal bundle?
c) If p2=4, what is the new optimal bundle?
d) Decompose the price effect into income and substitution effect and provide a graphical representation of your results.
Challenges of Nepal's foreign trade.
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EBK PRINCIPLES OF MACROECONOMICS
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