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Q. "Under floating rates, the economy is more vulnerable to shocks coming from the domestic money market." Discuss. Answer: It is true statement, under floating rates an incr
how is exchange rate determined?
Q. Why do governments prefer to avoid current account deficits that are too large? Answer: A current account debit may possibly pose no problem if the borrowed funds
Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate? Answer: The labour component of the price of 1 is bigger than that of p
WHY IS INTERNATIONAL TRADE IMPORTANT FOR SOUTH AFRICA
Q. Describe the main provisions of the Maastricht Treaty of 1991. Answer: It identified for a single currency by January 1/1999 harmonizing social security policy insid
Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e
what is world trade
When asked by the Carnegie Commission to prepare a report on post war Preferential Trading Agreements, Viner (1950) pointed out that they are not free trade. He used the concepts o
How do countries gain under the increasing cost assumptions
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