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Q. Discuss the main factors affecting the position of the AA schedule.
Answer: Revolutionize in the domestic money supply changes in the domestic price level changes in the expected future exchange rate changes in the foreign interest rate and shifts in the aggregate real money demand schedule.
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
WHY IS INTERNATIONAL TRADE IMPORTANT FOR SOUTH AFRICA
Q. It is claimed that the persistence of protectionism is often the result of the fact that those who lose from trade are usually a much more informed, cohesive and motivated a gr
Criticism against Hechscher-Ohlin type trade theories is explained below: The foremost criticism leveled against Hechscher-Ohlin type trade theories are that they views compara
Q. It is still the conventional wisdom in the U.S. that compliance with NAFTA needs is having a deleterious effect on U.S. highway safety standards, on U.S. pollution and other en
Q. There is frequently a conflict between short-term and long-term interests in trade. Discuss. Answer: In trade models that the short term is usually defined as that (conce
Q. Explain what a "vehicle currency" is. Why is the U.S. dollar considered a vehicle currency? Answer: A vehicle currency is one specifically widely used to denominate inter
Q. What is the policy of sterilization? Give an example. Answer: • Untainted foreign exchange intervention - policy by which central banks perform equal foreign
what are the theories supporting protectionism
Q. Use the fixed exchange rate DD - AA model to describe the economy's short-run equilibrium. Then, use the same figure to study an expansionary monetary policy. Show that the pol
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