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Q. "The balance of payments is always balanced." Discuss.
Answer: True each international transaction automatically enters the balance of payments twice once as a debit and once as a credit.
Current account + financial account + capital account = 0
Q. Use a figure to study the effects of a change in market belief with regard to the fixed exchange rate, in particular assume market participants expect the government to devaluat
Q. Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory. Answer: Expected p
Foreign Direct Investment Theoretical Definition: The causal (independent) variable is the inward Foreign Direct Investment (FDI) to the technology sector. Foreign direct i
Q. What is the national income identity for an open economy? Answer: Y = C + I + G + EX - IM.
if the US dollar depreciates dramatically relative to the Chinese yuan, what effect would this have on consumers and businesses in each country? When is a falling dollar good or ba
Q. "The balance of payments is always balanced." Discuss. Answer: True each international transaction automatically enters the balance of payments twice once as a debit and o
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which book by adam smith explains the absolute advantage ?
Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi
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