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Q. Explain why even owners of capital that cannot be moved can avoid more of the economic stability loss due to fixed exchange rates when Norway's economy is open to capital flows.
Answer: The major reason is through diversification. If Norway's capital market is incorporated with those of the EMU neighbours Norwegians will invest some of their wealth in other countries even as at the same time part of Norway's capital stock will be owned by foreigners.
Q. What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets? Answer: Will increase because of fear that foreign deposits in the United States wi
Q. What explains the nearly universal scope of the Great Depression? Answer: The international gold typical played a central role in starting deepening and spreading the Great
The Source of Comparative Advantage can be understood as follows: The source of comparative advantage could be productivity differential (Ricardo) or differences in the factor
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Q. Suppose Russia's inflation rate is 200% over one year, but the inflation rate in Switzerland is only 2%. According to relative PPP, what should happen over the year to the Swis
I am trying to complete this homework assignment and I need to use an example to describe and explain the classical theory of international trade, could you guys help me out?
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