Question
_____________________Effect is an effect that describes
the relationship between an increase in productivity, higher exchange rates and an increase in wage growth. This effect shows that when there is an increased level of productivity in the tradable goods sector of a country, there tends to be a higher exchange rate, consumer prices are also likely to be higherSolution
The Balassa-Samuelson effect states that productivity differences between the production of tradable goods in different countries explain large observed differences in wages and in the price of services and between purchasing power parity and currency exchange rates. It suggests that an increase in wages in the tradable goods sector of an emerging economy will also lead to higher wages in the non-tradable (service) sector of the economy. The accompanying increase in prices makes inflation rates higher in faster-growing economies than it is in slow-growing, developed economies .
What is the optimal number of trips to bank such that cost of holding money is minimum, if the rate of interest foregone is 10% , income is 100 and the ...
In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending ______
The foreign capital investment in India on the eve of independence concentrated on the following sectors of the economy
(i) railways
...
During the first stage of a total product curve, the total product is
What is the degree of homogeneity in case of Constant Elasticity of Substitution production function?
Which of the following is/are included while calculating the national income using the income method?
(1) Wages and salaries in cash
...
Suppose that a firm has the cost function for a plant as given below
C(w, r, q) = 0.5q(w+r)
where q is output, w is the cost of labour l a...
Consider a closed economy wherein
C = 0.8 Yd , t = 0.25 , I = 900 – 50i , G = 800, L = 0.25 Y – 62.5i , M/P = 500
Where in Yd = Di...
Which of the following is NOT a correct statement in the context of National income?
An analyst has data on wages for 100 individuals. The arithmetic mean of the log of wages is the same as:
