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Q. Explain how the German Bundesbank gained its low-inflation reputation.
Answer: Essentially Germany's experience with hyperinflation in the 1920s and yet again after World War II left the German electorate with a deeply rooted fear of inflation. The law set up the Bundesbank singled out the defence of the DM's real value as the primary goal of the German central bank.
Q. Why is it that an industry is performing under conditions of domestic internal scale economies (applies to firm in the country) - then the resultant equilibrium can't be consis
Q. Illustrate why when Norway unilaterally fixes its exchange rate against the euro but leaves the krone free to float against the non-euro currencies, it is unable to keep at leas
Explain the Global Firms and the Borderless Global Economy
is the stolper samulson theorem is relevant in these days
Q. What are the factors affecting the demand for foreign currency? Answer: Three factors that affect the demand for foreign currency are risk, expected return, and liquidity.
Q. Given the opportunity to sell at world prices, the marginal (opportunity) cost of selling a ton domestically is what? Answer: $5/ton.
Q. Is Europe an optimum currency area? Answer: Yes the area's economy is strongly integrated with its own: most EU members export as of 10 to 20 percent of their output
ABOUT THIS THEORY
Q. In Foreign and Home there are two factors of production, land and labor, used to produce only one good. The land supply in each country and the technology of production are ex
draw diagram of price leadership model
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