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Q. Using the diagram, show what happens to the composition of production (that is quantity of cloth per 1 unit of food) in Australia once trade is established between the two coun
Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e
explain the basis for international trade
How to calculate effective rate of protection
Q. What are the reasons for the world as a whole running a substantial current account deficit? Answer: This deficit improved sharply in the early 1980s and has remained high.
Q. Should the IMF be abolished? Discuss. Answer: Arguments for eliminating the IMF must mention moral hazard and insistence on high interest rates and hasty structural
distinguish between net terms of trade and gross terms of trade
argument about fair distribution of income and gnp as a measurment of economic growth
Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory. Answer: Expected pric
Q. It has been argued that economic dualism that typifies relatively less developed or poor countries, is a barrier to participation in the global village, and lessens the chances
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