F08ex3364_intertemporal

F08ex3364_intertemporal - You are not allowed to consult...

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You are not allowed to consult any notes or books. You have to write your answers in the blue book that the persons proctoring the exam give you. Your answers should reflect only your knowledge. Attempting to consult with others or to look at someone else’s work constitutes academic misconduct. Please return this page with your blue book. Name:. .......................................................... Econ 364 M. Muniagurria Fall 2008 Exam 3 (I) Intertemporal Trade Consider the model of intertemporal trade developed in class. Assume there are two countries (call them “Home” and “Foreign”) with nice PPF frontiers between present and future consumption good (corn) . Home has a comparative advantage in the production of time 0 corn and Foreign has a comparative advantage in the production of time 1 corn. Countries have nice and identical preferences and are trading freely intertemporally. If a country borrows at time 0 from the other it will do so by issuing an IOU in exchange for the corn. If instead a country lends
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This note was uploaded on 02/23/2011 for the course ECON 301 taught by Professor S.chiu during the Spring '11 term at HKU.

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F08ex3364_intertemporal - You are not allowed to consult...

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