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Q. Explain why under fixed exchange rate, monetary policy is ineffective whereas under floating exchange rate it is effective in rising output. Answer: In floating by purchasi
1.concepts of terms of trade,factors affecting terms of trade. 2.gross & net barter terms of trade. 3.terms of trade & economic development
theory of opportunity cost?
Q. In the year 2000, Americans flocked to Paris. What economic forces made French goods seem so cheap to residents of the United States? Answer: One main factor was a sharp f
Explain Integration of International Trade and Foreign Investment
Q. What factors lie behind capital inflows to the developing world? Answer: Several developing countries have received a lot of capital inflows that lead them to an
Q. Explain the purpose of the given figure? Answer: To demonstrate that spot and forward exchange rates are in general close to each other.
How to calculate effective rate of protection
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
The recessionary gap in a country is $1 trillion. The spending multiplier is 5. For every $50 billion borrowed, interest rates increase by 0.1 %. For every 0.1% increase in interes
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