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Q. Explain the credibility theory of the EMS.
Answer: In this approach the other EMS countries in effect imported the credibility of the German central bank in fighting inflation so discouraging the development of inflationary pressures at home. This is recognized as the credibility theory of the EMS.
Q. It is argued that import substitution is a misguided trade policy if the intent is to show long-term economic growth. Illustrate the reasons underlying this argument. Answe
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The Concept of Comparative Advantage is explained below: To illustrate the concept of the comparative advantage, we take the instance of two equi-sized equi-endowment countries
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