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Relative Prices and Supply
Trade in a OneFactor World
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aggregate demand analysis balance of payments borrowing capital causes central bank Chapter consumers consumption cost country's current account debt default deficit depreciation DM deposits dollar/DM exchange rate economists economy's effect employment equal equation equilibrium Eurocurrency Eurodollar example exchange-rate export external balance factors of production fall Figure firms fixed exchange rates floating exchange rates foreign assets foreign-exchange market free trade gains from trade German growth Home's increase industrial countries industrial policy inflation interest parity condition international trade investment Japan LDCs loans long-run macroeconomic manufactures monetary policy money demand money supply national income nominal nontradables output percent price level problem production possibility production possibility frontier purchase raises rate of return real exchange rate real money relative price relative supply reserves result rise schedule sector shift short-run shows subsidy surplus tariff terms of trade theory tion tradables trade policy transactions wage rate workers