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Globalization
The procedure of interlinking financial markets in various countries into a common, world pool of funds to be accessed by both between borrowers and lenders. It came about as a result of the growth in international trade.
Q. Developing countries have often attempted to establish cartels so as to counter the perceived or actual inexorable downward push on the prices of their exported commodities. OP
Q. What are the predictions for the long run of the Monetary Approach? Answer: Money supplies- Known the equations E $/E = P US /P E P US = M S US /L(R $
HOW TERMS OF TRADE IS DETERMINED
Q. Explain why one can write the demand for money as follows: Md = P L (R, Y) Answer: The collective money demand is proportional to the price level. Imagine that every prices
Does the existence of non-tradable goods allow for deviations from Purchasing Power Parity? Answer: Yes the continuation of non-tradable goods permits deviations from Purchas
Q. Explain how the AA schedule is derived. Answer: For a fixed real money supply an enhancement in output leads to an increase in the domestic interest rate. In the foreign e
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
Explain why Relative PPP is useful when comparing countries that base their price levels on different product baskets. Answer: For instance If the U.S price level increase by
Q. Evaluate the Argentinean Convertibility Law of April, 1991. Answer: Excellent idea in the short run disastrous idea in the long run. The law was discarded only in Ja
The Source of Comparative Advantage can be understood as follows: The source of comparative advantage could be productivity differential (Ricardo) or differences in the factor
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