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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
difference between classical and neo classical theory of international trade.
Assess the supply and demand of international reserves. Discuss the major determinants of the demand for international reserves: 1.) the monetary value of international transaction
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Q. What is the purpose of the following figure? Answer: The use of the figure is to show the inflation convergence within the six original EMS members. The f
Q. What can you learn from the figure below, which depicts the US GNP and its components for the year 1997? Answer: The U.S. GNP is about 8 trillion expenditure represents
Q. Using the diagram, show what happens to the composition of production (that is quantity of cloth per 1 unit of food) in Australia once trade is established between the two coun
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
Q. Explain the Law of One Price. Give an example. Answer: The law of one price affirms that in competitive markets free of transportation costs and trade barriers ide
explain the basis for international trade
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