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Q. What do you think about dollarization? Answer: The respond is almost certainly a bad idea unless in the very short run. It must talk about the loss of seigniorage a
Q. What can one learn from the following figure? Answer: The figure shows the U.S. current account as well as net foreign wealth from 1977 until 1996. It illustrate that a
Q. Explain how the timing of a balance of payment crisis is determined. Be careful to state all assumptions. Answer: The assumptions of the model are: Prices are el
Q . Use the following table to demonstrate the significance of macroeconomic policy coordination. Demonstrate that the two governments would have been happier if the two of them h
In the Ricardian analysis, why does each trading partner have an incentive to produce at an endpoint of its production-possibility frontier? Why are prices of factors of production
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Q. Using the DD - AA framework, show the phenomenon of overshooting. Use a figure to explain when it is taking place. Answer: The figure below illustrates the phenomenon of ov
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A good analysis in increasing cost theory with graphical analysis
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