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Q. Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?
Answer: By initiating a new currency and initially pegging it to the dollar. At the cost of extensive bank failures high interest rates in 1995 and the shift to a fixed upwardly crawling peg and a substantial real appreciation of the local currency.
what is the free trade
Q . Now the monopolist discovers that it will export as much as it likes of its steel at the world price of $5/ton. It will thus expand for- export production up to the point whe
Critically evaluate the classical theory of international trade
Q. How A Central Bank Fixes the Exchange Rate? Answer: The Central bank should always be willing to trade currencies at the fixed exchange rate with the private actors in the f
WHAT ARE THE METHODS OF FDI
Q. Explain Tobin's idea of "Don't put all your eggs in one basket." Answer: The idea of diversification advanced with Tobin in his Attitude Towards Risk as well as Por
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Using examples, from the government, illustrate the significant opportunity cost.
Q. Explain the effects of a permanent increase in the U.S. money supply in the short run and in the long run. Assume that the U.S. real national income is constant. A raise in
According to the Linder theory, trade will occur in goods that have overlapping demand. With aid of a graph, illustrate this theory and its implications. Make use of graph
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