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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 the reason that it doesn't allow for price rigidities. It assumes that prices are able to adjust right away to maintain full employment as well as PPP.
Q. Explain why large interest rate differences would be strong evidence of unrealized gains from trade. Answer: The difference between offshore and onshore interest rates on
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What will be the effects of an increase in real national income on the interest rate? Answer: An enhance in real national income will increase the interest rate. If investment
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Q. One of the usually used assumptions in deriving the Heckscher-Ohlin model is that tastes are homothetic, or that if the per capita incomes were the similar in two countries, th
Q. Why do governments prefer to avoid current account deficits that are too large? Answer: A current account debit may possibly pose no problem if the borrowed funds
The hospital, as an open system, affects and is affected by the surrounding environment; it is incumbent on staff to monitor and continuously track the variables contained in order
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