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Q. It can be demonstrated that any protectionist policy, which effectively shifts real resources to import competing sector or industry, will harm export industries or sectors. T
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
Q. What are the main factors determining the aggregate money demand? Answer: Three major factors: the price level, interest rate and real national income. A increase i
Theory of reciprocal demand
Q. Using figures for both the short run and the long run, show the effects of a permanent increase in the U.S. money supply. Try to line up your figures to the short and long run
Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory. Answer: Expected pric
Q. Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997? Answer: By initiating a new currency and init
Q. The Specific Factors model makes a distinction between general-purpose factors that can move between sectors and factors that are specific to particular uses. How do difference
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
why is international trade important for south africa
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