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Q. Present and explain the Fundamental Equation of the Monetary Approach. Answer: Suppose E$/E = PUS/PE and that domestic price levels depend on domestic money demand
Q. Explain how a rise in real income affects aggregate demand. Answer: An increase in domestic real income Y leads to a rise in disposable income Yd. This increases
Q. "Fixed exchange rates are not even an option for most countries." Discuss. Answer: Durable fixed exchange rate arrangements may possibly not even be possible unless c
Ask question #Effects of Tariff quota#
Explain Purchasing Power Parity. Answer: PPP ( ) states that the exchange rate between two countries' currencies equals the ratio of the countries' price levels. A decr
Q. "It is in the interest of each depositor to withdraw her money from a bank if all other depositors are doing the same, even when the bank's assets are sound." Discuss. As par
Q. What is the real exchange rate between the dollar and the euro equal to? Answer: Let actual dollar/euro exchange rate q$/ENominal exchange rate E$/EPrice of an unchan
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
Explain about constant,increasing and decreasing opportunity cost
what are the alternative theories of trade?
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