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ans is B here cus 4% for 3 years so it could be 12% and answer can be A but realistically we never know by how much it actually increases....though it is logical that it can never be below 12% but it can surely be higher...so B
ANS could be D cus they wanted a market system approach so the other 3 can't be the answer as it is rather more planned than free
ANS is A and Purchasing Power Parity just means what it's name states, and that is the power of a country to purchase goods from another country...and according to this question the obvious reason to check whether one country should trade with the other..is the price levels of the products of the 2 countries
A rise in the price of Jam will cause a contraction in demand of jam and an increase in demand for honey (substitutes) ... Therefore, this increase in demand will raise the price of Honey...
ANS is C cus out of the other 3 options, C is the only one that appears like a logical reason as to NOT undertake the project....A and B is false wheeras D is not directly related to the question
hmm this question does seem wierd but ANS is D according to me as when i read the diagram...it shows the trading possibility curve and PPC and it shows that it imports more of good X and produces more of good Y hence this would mean they are producing OK of good Y and 0 of Good X as they are most probably importing them
The answer is B according to me...
this one is a little messy so try to understand.....CURRENTLY the exr is 1 pound=$3 and the country X price for food is $2 and country Y is 1pound($3) so there is no point in trading food.......as for clothing Country X sells it for $4 and country Y sells it for 1 pound($3) so it is worthwhile for Contry X to trade with country Y BUT imagine if the transport cost was 0.33 pounds ($0.99) then this would mean that the ACTUAL price of clothing to the US would be $3.99 (or $4) which is the exact same price meaning there won't be any use to trade..
It's mathematics...
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