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Q. Explain how the money markets of two countries are linked through the foreign exchange market.
Answer: The financial policy actions by the Fed affect the U.S. interest rate altering the dollar/euro exchange rate that clears the foreign exchange market. The European System of Central Banks (ESCB) is able to affect the exchange rate by changing the European money supply and interest rate.
defination, types
Q. Why would you suggest to a government to use a floating exchange-rate regime? Answer: Floating Exchange Rate is an exchange rate in which central banks don't inter
Countries are indulged in trade because there are mutual gains from trade. But then, what are these gains which they obtain, and how are these realized? Comparative advantage theor
wate is the national incom of indi aims & objectives
review the general equilibrium conditions under autarky and given free trade using the opportunity cost theory of trade
Q. What is the theory of Second Best? Answer: The principal of the second best notify us that when an economy suffers from multiple distortions the removal of only a few
Q. Suppose Australia, a land (K)-abundant country and Sri-Lanka, a labor(L)- abundant country both produce labor and land intensive goods with the similar technology. Following t
Q. Discuss the values of private saving in closed and open economies. Answer: In the closed economy private saving Sp is equal to I + (G - T) and in an open economy private sav
Assume the United States exports 1000 computers at a price of $3000 each and imports 15 UK autos at a price of 10000 pounds each. Assume that the dollar/pound exchange rate is $2 p
Question: Banks contribute to the economic development of a country. Banks have always been financing projects that help individuals and enterprises fulfill their plans. Howev
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