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Q. Explain why price levels are lower in poorer countries. Answer: One theory explicate the difference in prices on different endowments of capital and employment Bhagw
Q. Explain why under fixed exchange rate, monetary policy is ineffective whereas under floating exchange rate it is effective in rising output. Answer: In floating by purchasi
If one were to use the simple monetary model to predict the $/Euro exchange rate (L is constant), what would the expected exchange rate be?
What are the reasons behind the growing importance of services in trade ?
"Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lead t
Question : Banks find it more profitable to lend money as the margin on lending is much higher than any other banking activity. However, banks have to assess credit risks and t
discus how every economy is essentially part of the international economy
The Source of Comparative Advantage can be understood as follows: The source of comparative advantage could be productivity differential (Ricardo) or differences in the factor
According to the Linder theory, trade will occur in goods that have overlapping demand. With aid of a graph, illustrate this theory and its implications. Make use of graph
Explain the effects of a permanent increase in the U.S. money supply in the short run and in the long run. Assume that the U.S. real national income is constant. A raise in th
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