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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 will shift the DD to the right. If AA leftovers unchanged the new equilibrium will be at a higher Y and lower E. Ever since E is the nominal exchange rate a lower E is an appreciation of the currency.
What are floating rate notes? Explain the various types of FRNS FRNs are bonds that do not carry a fixed rate of interest. The various forms of FRNs are : Perpectual FRN Minmax
Q. How A Central Bank Fixes the Exchange Rate? Answer: The Central bank should always be willing to trade currencies at the fixed exchange rate with the private actors in the f
what are the alternative theories of international trade?
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.
Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory. Answer: Expected pric
Q. In the year 2000, Americans flocked to Paris. What economic forces made French goods seem so cheap to residents of the United States? Answer: One main factor was a sharp f
Hepburn’s Speed Model, the coefficients of vehicles are indicated for C and D. As the chief of operations in your organization, you are responsible for presenting the yearly budget
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how to start a project work on this topic
The international financial system
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