What is meant by the quantity theory of money

Assignment Help Macroeconomics

Reference no: EM131900058

Problem

1. What is meant by the term balance-of-payments adjustment? Why does a deficit nation have an incentive to undergo adjustment? What about a surplus nation?

2. Under a fixed exchange-rate system, what automatic adjustments promote payments equilibrium?

3. What is meant by the quantity theory of money? How did it relate to the classical price-adjustment mechanism?

4. How can adjustments in domestic interest rates help promote payments balance?

Reference no: EM131900058

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