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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. Explain the purpose of the following figure. Show the effects of German unification on Germany's interest rate. Answer: The major purpose is to show that different i
Question : Banks find it more profitable to lend money as the margin on lending is much higher than any other banking activity. However, banks have to assess credit risks and t
Identify and explain the three basic economic question that the group of survivors will have to answer everyday
International monetary system
Q. Present and explain the Fundamental Equation of the Monetary Approach. Answer: Suppose E$/E = PUS/PE and that domestic price levels depend on domestic money demand
Revisions of Conventional Trade Theory
Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affe
Theories about the Problems of LICs are discussed below: In order to explain this big problem of poverty and of the asymmetric ownership of the wealth and income in the world,
what is the nature of the proximity-concentration that firms have to deal with then making decision regarding foreign direct investment?
Q. What explains the sharply divergent long-run growth patterns? Answer: It lies in the political and economic features of developing countries and the way these have
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