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Q. Explain the issues involved with the Fed acting as a lender of Last Resort (LLR).
Answer: On the one hand LLR make possible the Fed to avoid panic and disturbance to proper functioning of financial markets. On the other hand using the policy may possibly cause problems of moral hazard.
Explanation with critical appraisal
Q. Explain the phenomenon of capital flight. Answer: The reserve defeat accompanying a devaluation scare is habitually labeled capital flight for the reason that the assoc
Q. Even though it is very clear in the context of the Specific Factors model that an expansion of international trade will make losers as well as winners, economists still claim t
difference between differencial treatment in reverse andspecial and differencial treatment
what is was the weakest model
Q. If trade were to open up between R and P, where could the world terms of trade locate in the figure above (somewhere on the PC/PF axis)? Could relative wages (w/r) in the two c
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
discus how every economy is essentially part of the international economy
Q. Describe the effects of the Smoot-Hawley tariff imposed by the United States in 1930. Answer: It had a damaging consequence on employment abroad. The foreign response occu
the New Trade Agenda
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