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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. "The balance of payments is always balanced." Discuss. Answer: True each international transaction automatically enters the balance of payments twice once as a debit and o
what is opportunity cost
Q. Explain how an increase in government spending would affect the DD-AA schedule in the short run. Answer: A raise in government spending will raise aggregate demand, which wi
discuss the possibility of trade if factor endowment are identical and tasde is different
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Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affe
explained with example
The Arguments for Flexible Exchange Rates
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
how do I graph partial equilibrium analysis with transport costs
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