Answer:
(a) Jesus would argue for a(b) Wealthy people would believe that exchange rate for earthly riches should be high.
The reason for this is that the mental makeup of wealthy people is such that they are naturally attracted to the earthly riches and thus would insist on high exchange rate when told to give up the earthly riches in favor of eternal wealth.
(c) The perceived exchange rate for earthly riches falls as one approaches death because in that scenario attraction for earthly riches is on a declining trend.
Answer:
Balance of payments is like a financial report on the international trade which gives the insight on the financial status of the economy with respect to financial transactions. It is divided into current account, financial and capital account.
The law of one price states that when the price of a good is displayed in same currency then the price of the same good in every country will be same.a.The three assumptions of law of one price are as follows:
• Tax structure between countries is same,
• No transportation costs,
• And the goods are capable of being traded.
b.If there are no border problems between two countries and all the above three conditions are fulfilled then there is no reason that the law of one price is not applicable for labor as well.
c.This law will hold truer for capital because labor move with emotional and social baggage so it is difficult for them to move, while the mobility of capital is high. So, the law will be more applicable to capital.
Answer:
Balance of payments is like a financial report on the international trade which gives the insight on the financial status of the economy with respect to financial transactions. It is divided into current account, financial and capital account.
The balance of trade is the difference between the exports and imports, and it is one of the components of current account. Now when the imports are more than exports then there will be balance of trade deficit but this deficit is just one part of current account but if there is surplus in other parts of current account more than the deficit then overall currenct account will be in surplus.