Economics

Question 1

♦ECON♦ Currency Exchange Rates

Answer 1

*VISAO DO AMERICANO*

Covered = fwd BRL / USD = (1 + 7%) / (1 + 2%) * Spot

Uncovered = Rbrl - Rusd

PPP = ∆Spot = Eπbrl - Eπusd

Int. Fischer Relation = Rbrl - Rusd = Eπbrl - Eπusd

Question 2

♦ECON♦ Cobb-Douglas (GDP)

Answer 2

GDP Total Y = T * K ^α * L ^{( 1 - α)}

GDP per worker Y / L = T * (K / L) ^α

Question 3

♦ECON♦ Potential GDP growth rate

Answer 3

ΔY/Y = ΔT/T + α * ΔK/K + (1 - α) * ΔL/L

Question 4

♦ECON♦ α (share of K in Y)

Answer 4

α = r * K/Y

Question 5

♦ECON♦ Growth Theories (Classical, Neoclassical and Endogenous) + Convergence (Absolute, Conditional and Club)

Answer 5

Classical Growth = If GDP / capita > subsistence level, than pop. will grow until is back at sub level Neoclassical = K growth is only temporary —> g* = θ / (1 - α) and G* = θ / (1 - α) + ∆ L Endogenous = K have constant return (R&D) Absolute Convergence = Developed will develop Conditional = Based on certain conditions Club = And only if part of a club

Question 6

♦ECON♦ Mundell-Fleming Model

Impact of monetary and fiscal policies in the fx rate

Answer 6

Question 7

♦ECON♦ Stock price growth relation to GDP

Answer 7

Δ P = ΔGDP + Δ(E/GDP) + Δ(P/E)