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Q. Using an equation, explain why governments prefer to avoid excessive current account surpluses.
Answer: This pursue from the national income identity S = CA + I which says that total domestic savings S is divided among foreign asset accumulation CA and domestic investment I.
Q. Explain why under the gold standard a perpetual surplus or a perpetual deficit is impossible. Answer: Since specie inflows drive up domestic prices and restore symmetry in
Q. Evaluate the Argentinean Convertibility Law of April, 1991. Answer: Excellent idea in the short run disastrous idea in the long run. The law was discarded only in Ja
explained with example
Financial Resources: The first investor is the Fitaihi Company under the leadership and technical and medical assistance of Dr. Walid Fitaihi, who was then joined by other investo
what are the limitations of the net barter terms of trade?
The Arguments for Flexible Exchange Rates
Critically evaluate the theory and outline the necessary assumptions for the theory to hold in it''s purest form
curve
Q. Why Study Fixed Exchange Rates? Answer: Four main reasons: • Managed Floating - Current monetary system is hybrid of floating rate and pure fixed systems fix
how is exchange rate determined?
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