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The Concept of Comparative Advantage is explained below: To illustrate the concept of the comparative advantage, we take the instance of two equi-sized equi-endowment countries
Q. What is the national income identity for an open economy? Answer: Y = C + I + G + EX - IM.
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
What is the Postwar International Monetary system
Vernon's product cycle theory
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Explanation of haberler opportunity cost with diagrams
Q. Discusses the effects of a rise in the interest rate paid by euro deposits on the exchanger rate. Answer: For a known U.S. interest rate and a given expectation wi
Suppose that industry 1 is monopolistically competitive, with a CES sub-utility function: U(c1,c2 ) = c1? + c?2 , 0 We let the marginal costs be denoted by c1(w,r), and the fixe
Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affe
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