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Q. Explain why after, say Norway unilaterally pegs the krone to the euro, domestic money market disturbances will no longer affect domestic output despite the continuation of float-rate regime against non-euro currencies.
Answer: Because Norway's interest rate should equal the euro interest rate any pure shifts in the AA curve will result in immediate reserve outflows or inflows that leave Norway's interest rate unchanged.
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Q. Describe alternative forms of capital inflow to finance external deficits and explain why these methods were used in different times? Answer: The capital inflows to facili
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I am writing a paper on dependancy theory in Ghana and I am having trouble understanding the basics of peripheral capitalism.
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Q. Based on the case study, answer the following question: Can currency boards make low-inflation policies credible? Answer: Currency boards have the power to bring in anti-
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