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Q. Explain the purpose of the following figure. Show the effects of German unification on Germany's interest rate.
Answer: The major purpose is to show that different interest rates exist for different assets since foreign currencies are different assets. From 1990 to 1995 the DM interest rate is elevated than that of the United States. Exclusive of this period the dollar rates are higher reflecting higher inflation in the United States and depreciating of the dollar versus the German currency.
A good analysis in increasing cost theory with graphical analysis
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
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
organistion and style of writing the research report
Q. Explain how an increase in the real exchange rate affects exports and imports. Answer: While the real exchange rate rises domestic products are cheaper relative to
Adjustment in international monetary system
The Republic of Ireland has had colossal economic problems for many years. On the other hand, in the last two decade, the nation has experienced a thriving economy and has becom
Q. What types of international transactions are recorded in the balance of payment accounts? Answer: Three kinds' transactions that involve exports and imports of goods and s
what is the publication of opportunity cost theory?
Opportunity cost theory
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