Flexible exchange rate system

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Reference no: EM1320076

1. How did the Bretton Woods system operate? What caused its collapse? Some think the current system of managed but floating rates is too unstable. What would generate the instability?

2. What is foreign aid and what is the goal of foreign aid? Does foreign aid promote economic development? Explain briefly.

3. How can two countries both be better off as a result of trade? How can tariffs protect U.S. jobs? Do tariffs lead to a net increase in jobs? Explain. Who are the winners and losers from trade restrictions? Given that trade restrictions impose losses on an economy, why are trade restrictions so common?

4. Describe developing countries and how they differ from industrial market economies. How can international trade help development? In what ways does the international economy impose problems on developing countries?

5. Why can't all the balance of payments accounts be in surplus? What factors determine the demand for British pounds in foreign exchange markets? How are exchange rates determined under a flexible exchange rate system?

Reference no: EM1320076

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