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Q. How did the international monetary system influence macroeconomic policy-making and performance during the gold standard era (1870 - 1914)?
Answer: London was the hub of the international monetary system. The most important responsibility of the central bank was to preserve the official parity between its currency and gold. To sustain this price the central bank desirable an adequate stock of gold reserves. Central banks try to avoid sharp fluctuations in the balance of payments.
Q. Discuss the problems that the EMU will face in the coming years. Answer: Europe isn't an optimum currency area so asymmetric economic developments within different cou
Q. Explain why, according to Feldstein and Horioka, one should expect that domestic investment rates diverge widely from saving rates. Answer: The decisions of corporations t
Discuss about the Nature of Financial Crises
Question 1 A local manufacturer of work gloves and gardening gloves has been enjoying moderate success in its local markets with a physical sales team. The president is convin
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 wi
Q. Explain why the oil price shocks after 1973 made countries unwilling to revive the Bretton Woods system of fixed exchange rates. Answer: Using the GG - LL framework
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
using diagrams, corden''s theory of customs union under conditions of oligopoly and within the existence of external economics of scale.
Q. Explain why the exchange rate model based on PPP is a long-run theory. Answer: PPP theory is a financial approach to the exchange rate. It is a long-run theory for
What does the factor proportions theory posits
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