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Q. Explain how the AA schedule is derived.
Answer: For a fixed real money supply an enhancement in output leads to an increase in the domestic interest rate. In the foreign exchange market an enhancement in the domestic interest rate leads to a lower nominal exchange rate therefore appreciating the currency. Therefore the relationship among nominal exchange rate and output is negative this leads to a negative slope of the AA schedule which has the ostensible exchange rate and output on its axes.
Q. "The costs and benefits for a country from joining a fixed-exchange rate area such as the EMS depend on how well-integrated its economy is with those of its potential partners.
defination, types
Q. Using the GG - LL framework, analyze the effect of Libya subsidizing the Pakistani Nuclear programs. Answer: This will move the GG curve upward and to the left causi
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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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