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Q. Discuss the benefits and costs of joining a fixed-exchange area. Answer: Benefits generally gains from the stability of the area and reduced uncertainty. The compete
Q. Explain the causes of the U.S. Savings and Loans crisis of the early 1980s. Answer: On the one hand permitting S&L to make a lot riskier loans for instance loans on co
Q. What is the interest parity condition? Answer: The circumstance that the expected returns on deposits of any two currencies are equal when measured in the same currency is
Q. The U.S. is most probably the most open international market among the industrialized countries. What then does the U.S. have to took by joining the WTO? Answer: There ar
Q . Consider that the relative capital abundance of Australia was so much greater than that of Sri-Lanka, that we would have to locate Australia far to the right on the K/L axis.
what are the limitation of comparative advantage?
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
part of the return on the investment comes from the asset itself and part from the currency of the foreign currency. agree or disagree?
Q. Explain why the oil price shocks after 1973 made countries unwilling to revive the Bretton Woods system of fixed exchange rates. Answer: Using the GG - LL framework
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