Microeconomics

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1. Describe the process of – determination of the exchange rate between currencies.
Show a diagram. Explain fixed vs. flexible exchange rate notion. Show once a month exchange rate between 10 world currencies over the past 5-years (60 months)

2. Clarify what is absolute and comparative advantage for any nation. Show and explain a sample diagram demonstrating the notion. (See text or other sources for samples) Discuss arguments against free trade; Infant industry; Countering foreign subsidies; protecting domestic jobs; and emerging arguments.

 

3. Allude to three important reasons why nations trade. (Benefits of free trade) Who gains and who loses from a protective policies? Explain several current actions by the US which considered protctive.

 

4. Discuss measuring income Distribution using a geometic representation called the Lorenz curve. Explain the theories of desired income distribution using Productivity; and Access to education. Define poverty (Absolute & Relative). Show family data over past 20-yrs in US.

 

5. Make a case for the notion of a negative or positive externality. Show model that illustrate how to internalize the market failure. What are alternative goverment interventions to cure issues?

 

6. International trade can be stopped of stifled using Quotas; Tariffs; and Non-Tariffs, etc. World trade organizations have been developed around the world to counter these effects. Name at least top five explain how they try to address free trade.

 

7. (a) Describle the notion of balance of trade accounting?

    (b) Describe the following current accounts: Merchandise trade exports and imports; Service exports and imports; Unilateral Transfers. Research and explain the past 5 yrs data activity for the U.S. vs. ROW.

    (c) Relative to the capital account discuss the U.S. private capital going abroad and the foreign capital into the United States. Show how the balance has change since 1970’s until 2008. What was the impact of this change of direction on the current acccount?

 

8. Discuss the economic effects of third-party payers in Health Care demand. How do medical-saving-accounts mitgate this effect? Discuss what have been the results of testing medical saving account in USA. Can new government insurance help this situation?

 

 

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