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Q. Explain how an increase in government spending would affect the DD-AA schedule in the short run. Answer: A raise in government spending will raise aggregate demand, which wi
explain the product cycle theory in international trade
Q. Discusses the effects of a rise in the interest rate paid by euro deposits on the exchanger rate. Answer: For a known U.S. interest rate and a given expectation wi
Calculate the doublefactoral terms of trade (TD), formulated by Jacob Viner based on following information: Suppose in the base year of 2015, Px= 100, Pm= 100, Zx= 100, Zm= 100and
Q. What are the three types of gains from international transactions between the residents of different countries? Answer: 1. Gains due to comparative benefit and ec
Discuss the differences between Absolute PPP and Relative PPP . Answer: Absolute Purchasing Power Parity (PPP) states that the exchange rate between two currencies equals the
Q. Discuss the benefits and costs of joining a fixed-exchange area. Answer: Benefits generally gains from the stability of the area and reduced uncertainty. The compete
What is the significance of the observations made by OECD in this case study regarding “The OECD economies are more strongly dependent on the production, distribution and use of kn
Q. Discuss the role of more "transparency" in reducing the risk of financial crisis. Answer: Must discuss the Asian crisis where foreign banks lent money to Asian enter
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,
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