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Q. Explain why the dollar of the United States became the postwar world's key currency. Answer: 1. The untimely convertibility of the U.S dollar in 1945. 2.
Q. Explain Tobin's idea of "Don't put all your eggs in one basket." Answer: The idea of diversification advanced with Tobin in his Attitude Towards Risk as well as Por
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-
Q. Explain the Law of One Price. Give an example. Answer: The law of one price affirms that in competitive markets free of transportation costs and trade barriers ide
Q. What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets? Answer: Will increase because of fear that foreign deposits in the United States wi
Q. Explain why even owners of capital that cannot be moved can avoid more of the economic stability loss due to fixed exchange rates when Norway's economy is open to capital flows
1 Answer True or False. Brief explain your answer. No credit without explanation. a Bretton Woods. During the Bretton Woods system countries with large current account surpluses
Q. "Given that labor remains relatively immobile within Europe, the European Union's success in liberalizing its capital flows may have worked perversely to worsen the economic sta
Q. Countries that are willing to tolerate an unusually high quantity of pollution relative to their supplies of other factors would leads to export "pollution-intensive" goods. D
Q. Explain how an increase in government spending would affect the DD-AA schedule in the short run. Answer: A raise in government spending will raise aggregate demand, which wi
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