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Q. Using the GG - LL framework, analyze the effect of Libya subsidizing the Pakistani Nuclear programs.
Answer: This will move the GG curve upward and to the left causing the two countries to trade more therefore reducing the minimum value for the two countries to cooperate under a fixed exchange rate regime.
Q. Explain why the exchange rate model based on PPP is a long-run theory. Answer: PPP theory is a financial approach to the exchange rate. It is a long-run theory for
economic theories to explain free traden..
Q. One reason international trade has a powerful effect on the distribution of income within countries is that some factors are "specific", and therefore cannot move costlessly fr
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 t
How much Debate over the MNC and the Nations State
Q. Albania refused to engage in international trade for ideological reasons. To maximize its economic welfare it could choose to produce at which point in the diagram above? Sup
construct a production possibilities frontier that represents japan''s goal of producing both cars and housing. Assume the japanase economy is in a downtyrn and indicate with an Xt
Q. In recent cases, the U.S. placed quotas or protectionist tariffs on imported microchips and imported steel. In both cases the damage to "downstream" industries was obvious to
what does the law of reciprocal states about and how does it differ from the theories of smith and ricardo
Q. What is a country risk index? Explain the categories classified by business environment risk information The country risk index tries to incorporate the economic , geographi
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