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Q. How and why did Europe set up its single currency?
Answer: The why part of the question is associated to large fluctuations in the exchange rates between the European countries disturbed trade. As well one of the major reasons was to design a way to prevent future world war. The how part of the question is associated to the fall down of Breton woods and the European Currency reform of 1969-1978. The Werner Report of 1971 set up a three-phase program to lead to the EMU.
Q. What is the domino effect or contagion? Answer: The definition is the defencelessness of even seemingly healthy economies to crisis of confidence generated by events
Ask qu. What are the various forms of economic integration? estion #Minimum 100 words accepted#
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
HOW TERMS OF TRADE IS DETERMINED
Q. How can long-run values in the real exchange rate change? Answer: A elevate in world relative demand for U.S output origins a long-run real appreciation of the dollar
Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e
Q. Based on the 1997 Crisis and your own experience, what are the main weaknesses of the East Asian economies? Answer: The limitation is little productivity increases most of
Q. Why do we observe the Leontief paradox? Answer: There are several possible answers that they may be categorized into three groups. One would argue that the theory or model
is general equilibrum in trade
Special and Differential treatment
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