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Q. Explain why it may make sense for the United States, Japan, and Europe to allow their mutual exchange rate to float?
Answer: Even though these regions trade amid each other the extent of that trade is modest compared with regional GNPs as well as interregional labour mobility is low.
explain -haberler theorem
Q. In 1986, the price of oil on world markets dropped sharply. Since the United States is an oil-importing country, this was widely regarded as good for the U.S. economy. Yet in
Q. Using the DD - AA framework, show the phenomenon of overshooting. Use a figure to explain when it is taking place. Answer: The figure below illustrates the phenomenon of ov
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What is the Postwar International Monetary system
Q. "Trade liberalization could precede capital account liberalization." Discuss. Answer: It is probably true. The issue is associated to the theory of second best and
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Why we Devising an International Monetary System
Q. Explain why the exchange rate model based on PPP is a long-run theory. Answer: PPP theory is a financial approach to the exchange rate. It is a long-run theory for
Q. What prompted the EU countries to seek closer coordination of monetary policies and greater exchange rate stability in the late 1960s? Answer: 1. To improve Europe's role
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