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Principles of Macroeconomics

In an analysis of the market for paint, an economist discovers the facts listed below. State whether each of these changes will affect supply or demand, and in what direction.

a. There have recently been some important cost-saving inventions in the technology for making paint.

b. Paint is lasting longer, so that property owners need not repaint as often.

c. Because of severe hailstorms, many people need to repaint now.

d. The hailstorms damaged several factories that make paint, forcing them to close down for several months

Sample Solution

propaganda, therefore countries who did not want to reform would have felt pressured and obliged to comply with his policies, due to the non-existent financial help. By not providing funding for the reforms he wanted, Gorbachev created discontent, therefore Levesque argues “it is not surprising that East European leaders complained privately to their Soviet counterparts about Soviet neglect”. To Levesque, it is quite evident that Gorbachev’s lack of control played a big role in ultimately leading to the end of the Cold War, but it is not the only reason as to why this occurred because other factors such as the Soviet-American relations improving, Reagan’s presidency and his policies and the Soviet Union’s economy, contributed to why the Cold War came to an end. Relations between the Soviets and the Americans were damaged, and so were relations with Eastern European countries because Gorbachev’s focus was on the West and Soviet control was inadequate. Therefore, it is clear that the main reason for the end of the Cold War was the lack of control Gorbachev had over the Eastern European countries. Pemberton: Pemberton’s interpretation of Reagan’s leadership outlines why Reagan was a significant factor that influenced the end of the Cold War. Ultimately, he changed the political landscape of America by enforcing relationships with the Soviet Union through summits with Gorbachev. The Geneva summit in 1985 for instance, was essential in improving Soviet-American relations because Reagan and Gorbachev met for the first time to discuss international diplomatic relations and the arms race. Similar to Eisenhower, Reagan believed that a personal relationship among leaders was the necessary first step to breaking down the barriers of tension that existed between the two countries, which then allowed the following summits to be more effective, for example by setting out terms for treaties and forming consensuses. The 1986 Reykjavik summit discussed the banning of ballistic missiles proposed by Gorbachev and the Moscow Summit of 1988 allowed Gorbachev and Reagan to finalise the Intermediate-Range Nuclear Forces Treaty. Reagan’s goal was to convince Gorbachev that America desired peace above all else. Therefore, Pemberton considers Reagan to have positively impacted the end of the Cold War through his contribution to the 5 summits he had with Gorbachev. Pemberton argues Reagan “envisioned possibilities for change that many experts ridiculed” but he had difficulties convincing experts to implement the ideas he wanted to within the system. Although initially a “hard-line anticommunist”, he changed his views and his foreign policy because he “joined with Mikhail Gorbachev to bring the Cold War to an end”. After reaching a consensus with Gorbachev, Reagan made drastic changes in which he “directed the biggest defence buildup in history” and “disconcerted his arms control experts by envisioning a world free of nuclear weapons and by taking the first important steps towards achieving the goal” which exemplifies Reagan’s change in attitude to the Cold War. Reagan was extremely influential in the Cold War, especially solidifying a relationship with Gorbachev. In spite of this, although Reagan had a role in the end of the Cold War, he was not the main reason in leading to its end because t

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