Question 1a: Write a brief paragraph describing how the world price level can shift from P0...
Question 1a:
Write a brief paragraph describing how the world price level can shift from P0 to P1 in an economy.
Question 1b:
What will the trade balance be after the world price level moves to P1 ? Write in a brief paragraph what is causing the trade balance position.
Question 1c:
Over time what is likely to happen to the world price level and the trade balance? Write a brief paragraph describing what is causing this movement.
Question 1d:
What can prevent the world price level from moving in the way you described in question (C)? Write a brief paragraph describing the mechanics of how the world price level is prevented from moving in the way you described in question (C).
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Question 1a:
Write a brief paragraph describing how the world price
level can shift from P0...
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