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Q. Discuss the effects of government deficits on the current account. Answer: A difficult and hard issue that during the Reagan administration the creation of twin deficits whe
Suppose that industry 1 is monopolistically competitive, with a CES sub-utility function: U(c1,c2 ) = c1? + c?2 , 0 We let the marginal costs be denoted by c1(w,r), and the fixe
Q. Explain why East Asian countries have done so well relative to South American countries. Answer: Generally the reasons are less moral hazard less government debt to forei
Explain the complexities in the annalysis of balance of payment equilibrium
Q. What types of international transactions are recorded in the balance of payment accounts? Answer: Three kinds' transactions that involve exports and imports of goods and s
Q. "Even under flexible exchange rate regime, governments should not be indifferent to the behavior of inevitably and exchange rates surrendered some of their policy autonomy in o
(a) Consider there are two countries (country 1 and country 2) with two goods (X and Y). Further, under the assumptions of the Ricardian model, country 1 specialise in goods X. De
What is the Postwar International Monetary system
Q. Explain why the FDIC is following a "too-big-to-fail" policy of fully protecting all depositors at the largest banks. Answer: It is a tricky question the FDIC does that even
Role of foreign trade to the economic development?
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