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Explain how the money markets of two countries are linked through the foreign exchange market.
Answer: The financial policy actions by the Fed affect the U.S. interest rate altering the dollar/euro exchange rate that clears the foreign exchange market. The European System of Central Banks (ESCB) is able to affect the exchange rate by changing the European money supply and interest rate.
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
Importance of International Trades : The basis of international trade is to be found in the diversity of economic resources in different countries. All countries have not been end
Q. What is a country risk index? Explain the categories classified by business environment risk information The country risk index tries to incorporate the economic , geographi
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 Europe
what are the criticisms of OPPORTUNITY COST THEORY of international trade propounded by PROF.HABERLER and OHLIN
Since the 1990s there has been an increasing number of Regional Trade Arrangements(RTA). According to WTO in 2012 the number of RTA increase 2 fold compared to the 90s to 497. Is r
What can explain the failure of relative PPP to hold in reality? Answer: Government procedures of the price level differ from country to country. One cause for these differe
How have global economic institutions(e.g. IMF,WB, and WTO) been influenced by American values? Why have developing countries found it so difficult to adopt the neo-liberal econom
Q. Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997? Answer: By initiating a new currency and init
WHAT ARE THE ROLES OF FOREIGN TRADE IN ECONOMIC DEVELOPMENT
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