Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 20, Problem 14QP
To determine
Determine an observation, identify a question based on observation, develop a theory to answer the question, and identify two predictions based on the theory.
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Question 5
Explain the difference between the terms 'hypotheses" and 'theories'.
1) Why does the gravity model work?
A) Large economices became large because they were engaged in international trade.
B) Large economies have relatively large incomes, and hence spend more on
government promotion of trade and investment.
C) Large economies have relatively larger areas, which raises the probability that a
productive activity will take place within the borders of that country.
D) Large economies tend to have large incomes and tend to spend more on imports.
E) Large economies tend to avoid trading with small economies.
2) Which of the following does NOT explain the extent of trade between Ireland and
the U.S.?
A) historical ties
B) cultural Linguistic ties
C) Gravity Model
D) multinational corporations
E) large numbers of Irish-Americans
3) In the current Post-Industrial economy, international trade in services (including
banking and financial services)
A) dominates world trade.
B) does not exist.
C) is an increasingly important component of global trade.
D) is…
Towards the end of the 16th century the potato (originated in South America) was
brought to Europe. Within a short time period it became the prime agricultural crop
in Ireland. The population of Ireland was about 1.4 million in 1600 and increased to
about 8.4 million by 1841. The Irish economy was in a Malthusian state throughout
this period. According to the Malthusian model,
(a) What should have been the increase in productivity due to the introduction of
potatoes so as to generate (alone) a 6-fold increase in population?
(b) Draw the phase diagram that describes the evolution of population from one
steady-state to another.
(c) What should we expect the level of income per capita to be in 1841 relative to
the level in 1600?
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