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Q. Write an essay on the importance of a sound banking system in developing countries.
Answer: Students must describe the phenomena of moral hazard as a part of their answer, the debt crisis of the 1980s.
Explain the classical theory of employment with relaxed assumption?
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
part of the return on the investment comes from the asset itself and part from the currency of the foreign currency. agree or disagree?
Q. What factors lie behind capital inflows to the developing world? Answer: Several developing countries have received a lot of capital inflows that lead them to an
Q. One reason international trade has a powerful effect on the distribution of income within countries is that some factors are "specific", and therefore cannot move costlessly fr
Q. If a scale economy is the dominant technological factor establishing or defining comparative advantage, then the underlying facts explaining why a particular country dominates
Q. What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets? Answer: Will increase because of fear that foreign deposits in the United States wi
Explain the effects of a permanent increase in the U.S. money supply in the short run and in the long run. Assume that the U.S. real national income is constant. A raise in th
Explain the complexities in the annalysis of balance of payment equilibrium
Q. Who are the major participants in the foreign exchange market? Answer: 1. Commercial banks 2. Corporations 3. Nonblank financial institutions 4. Central banks
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