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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. Using a figure illustrate the simultaneous equilibrium of the foreign exchange and domestic money markets when the exchange rate is fixed at E0 and is expected to remain fixed a
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Q. Using the II - XX framework, show using a figure that fiscal policies by themselves cannot bring the economy to both internal and external balances. Answer: Starting at poi
Q. What are the predictions for the long run of the Monetary Approach? Answer: Money supplies- Known the equations E $/E = P US /P E P US = M S US /L(R $
INTERNATIONAL FINANCE International finance is concerned with the mobility of financial capital across the countries, and the problems and opportunities this mobility p
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Q. Discuss the effects of ongoing inflation based on the PPP theory. Answer: Other things equivalent money supply growth at a constant rate eventually results in ongoi
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