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Hormones fall into three structural categories. Amino acid derivatives, _________ hormones, or _________ derivatives.

Extra Credit Questions

Part B Obtain the equilibrium allocations , , , and prices , for this economy. Find also the current account in period 1. For this, assume , , , , and

Theory Question 1 (4 Parts) Consider a two-period small open economy where the representative household has a utility function of the form

The absolute and the relative PPP tend to hold well in the long run, but not in the short run.

Theory Question 1 (4 Parts) Consider a two-period small open economy where the representative household has a utility function of the form

Part C Suppose, for the rest of the question, that the representative household faces a borrowing constraint of the form

Theory Question 2 (2 Parts) Suppose that households in the economy have the following lifetime utility function:

Bruce and Sheila have been discussing the effects of an increase in the desire to save of the Rest of the World (RoW) on the world interest rate and the US current account balance. Bruce claims that both the world interest rate and the US current account balance should increase, while Sheila says that both should decrease. Which of the two is right?

Assume an economy where households face borrowing constraints. Here, a present tax cut will increase present consumption, while a present tax hike will decrease it.