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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. Explain how a rise in real income affects aggregate demand. Answer: An increase in domestic real income Y leads to a rise in disposable income Yd. This increases
WHY IS INTERNATIONAL TRADE IMPORTANT FOR SOUTH AFRICA
Q. What is the national income identity for an open economy? Answer: Y = C + I + G + EX - IM.
Q. Explain the difficulties in naming the new European currency. Answer: Amongst the reasons: Maintenance the name ECU would be misleading the ECU depreciated sharply ag
A vast body of literature has been dedicated to the study of social support and satisfaction. Social support is commonly viewed as one of the most important concepts of close pers
Q. Use the fixed exchange rate DD - AA model to describe the economy's short-run equilibrium. Then, use the same figure to study an expansionary monetary policy. Show that the pol
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
Question: (a) Illustrate the differences between inter and intra industry trade. (b) Foreign Investors generally tend to adopt a two-stage process when evaluating count
Q. Describe alternative forms of capital inflow to finance external deficits and explain why these methods were used in different times? Answer: The capital inflows to facili
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