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Q. A naïve implication of the DD - AA framework is that either fiscal or monetary policy can lead to full employment. Discuss why this view is naïve. Answer: 1. Inflation m
Q. Why do you suppose that South-South trade does not conform in volume, but does conform in pattern with expectations prepared by the Heckscher-Ohlin model? Answer: The patt
INTERNATIONAL TRADE can be understood as follows By the international trade, we signify the exchange of goods and services between different countries. For any individual count
Q. Explain Purchasing Power Parity. Answer: PPP () states that the exchange rate between two countries' currencies equals the ratio of the countries' price levels.
ln?(?FDI?_t )=ln??(C)+? ln?(?CNGDP?_t )+ßln?(?GDP?_t ?)+a ln?(DIST)+fCAFTA+?_(1 ) ln?(?EXPORT?_t )+?_2 ln?(?GDPM?_t )+?_3 ln?(?CPI?_t )+?_4 ln?(?GDPA?_t )+e
International monetary system
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
Development through stabilisation and reform can be understood as follows The reasoning here was that the trade and resource transfer could not, by themselves, lift L
Q. Explain how an increase in the real exchange rate affects exports and imports. Answer: While the real exchange rate rises domestic products are cheaper relative to
Q. Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory. Answer: Expected p
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