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Q. Explain why, according to Feldstein and Horioka, one should expect that domestic investment rates diverge widely from saving rates.
Answer: The decisions of corporations to invest as well as for households to save are different. Therefore globalization indicates more and different ways to save and invest and increasing the differences between the two ratios.
under fleible exchange rate regime what are the consenquences of current account deficit and surplus
Q. International trade leads to complete equalization of factor prices. Discuss. Answer : This statement is usually "true...but". Under a limited and strict set of assumpti
report writing for 1500 words
Q. What is the Fisher Effect? Provide an example. Answer: All moreover equal a rise in a country's expected inflation rate will ultimately cause an equal rise in the i
Q. Explain the difference between the following two expressions: Y = C(Y d ) + I + G + CA(EP*/P, Y d ) and Y = C + I +G + CA Answer: The first expression corresponds to a
Q. Several argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one part to another, protected or preferred o
alternative explanations to the theory of international trade.
Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate. Answer: The major points are: A raise in the European money supply will reduc
Q. What is the policy of sterilization? Give an example. Answer: • Untainted foreign exchange intervention - policy by which central banks perform equal foreign
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