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Explain how a country can peg (fix) its currency to another currency.
Explanation of a pegged/fixed currency should centre on how the central bank uses the currency market mechanism - buying and selling its own currency - to set the exchange rate in the LR. Using an S/D diagram, show how the corridor of the exchange rate can be set and then as the central bank can intervene to prevent the exchange rate from exceeding the floor or ceiling.
2. You are examining the effects of a specific tax of 10 cents imposed on the sales of a product that we shall call XYZ. To carry out your analysis, assume that the market is a per
Location of industry and localization of industry: Location of industry tries to answer the key economic question "where to produce". It involves deciding on the area that an
Illustrate and explain the changing demand for big mac using the indifference curve and budget line.
Reasons for International Trade?
A firm's production function is given by Q = √LK . The price of labour is w and the price of capital is r. a. The price of labour is $5 and the price of capital is $20. What is
In June 2009, Textile co. (a domestically located firm) purchased 1000 yards of cloth from India (a foreign country) for $1000. Textile co. hired Elizabeth and paid her $5000 to s
The demand for soft drinks has been estimated asQx 20PX 0.25PY0.45M 2 Determine the own, cross and income price elasticities of demand. Interpret your results.
EXCHANGE RATES: The current unit focuses on exchange rates and is a more in-depth study of foreign exchange markets from the perspective of financialeconomics.You have been ac
a) An enhances in the quantity demanded of a good can happen because consumers expect the price of that good to enhance in the near future. b) A price ceiling imposed above the
What is significance of methodological economics...
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