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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.
Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affe
Q. What can you learn from the figure below, which depicts the US GNP and its components for the year 1997? Answer: The U.S. GNP is about 8 trillion expenditure represents
Q. Is Europe an optimum currency area? Answer: Yes the area's economy is strongly integrated with its own: most EU members export as of 10 to 20 percent of their output
Q. Use the DD - AA model to examine and compare the response of an economy under fixed and floating exchange-rate regimes to a temporary fall in foreign demand for its exports.
Q. Using figures for both the short run and the long run, show the effects of a permanent increase in the U.S. money supply. Try to line up your figures to the short and long run
complete notes in foreign investment instiutions
Critically evaluate the classical theory of international trade
As the world seeks to find alternative means to produce clean power, fuel cells emerge as a promising source of power generation. Depending on their type, fuel cells can be utilize
ln?(?FDI?_t )=ln??(C)+? ln?(?CNGDP?_t )+ßln?(?GDP?_t ?)+a ln?(DIST)+fCAFTA+?_(1 ) ln?(?EXPORT?_t )+?_2 ln?(?GDPM?_t )+?_3 ln?(?CPI?_t )+?_4 ln?(?GDPA?_t )+e
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
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