Currently, the spot exchange rate is $0.85/A$ and the one-year forward exchange
rate is $0.81/A$. One-year interest is 3.5% in the United States and 4.2% in
Australia. You may borrow up to $1,000,000 or A$1,176,471, which is equivalent
to $1,000,000 at the current spot rate.

a. Determine if IRP is holding between Australia and the United States.
b. If IRP is not holding, explain in detail how you would realize certain profit in
U. S. dollar terms.
c. Explain how IRP will be restored as a result of the arbitrage transactions you
d. carry out above.

In north korea, a farmer’s income is the same as a dentist’s income. in a country with a mixed or market economy, the difference between those two professions might be more than 5 times different. how can you explain the fact that individuals doing the same work in different countries do not earn comparable salaries?

Acompetitive market in healthcare would a. overprovide healthcare because the marginal social benefit of healthcare exceeds the marginal benefit perceived by consumers b. underprovide healthcare because it would eliminate medicare and medicaid c. underprovide healthcare because the marginal social benefit of healthcare exceeds the marginal benefit perceived by consumers d. overprovide healthcare because it would be similar to the approach used in canada

Answer the questions about keynesian theory, market economics, and government policy. keynes believed that there were "sticky" wages and that recessions are caused by increases in prices. decreases in supply. decreases in aggregate demand (ad). increases in unemployment. keynes believed the government should increase ad through increased government spending, but not tax cuts. control wages to increase employment because of sticky wages. increase employment through tax cuts only. increase as through tax cuts. increase ad through either increased government spending or tax cuts. intervene when individual markets fail by controlling prices and production.