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Q. Explain why the dollar of the United States became the postwar world's key currency.
Answer:
1. The untimely convertibility of the U.S dollar in 1945.
2. The special position of the dollar in the Bretton Woods system.
3. The potency of the American economy relative to the devastated economies of Europe and Japan.
4. Central banks logically found it advantageous to hold their international reserves in the form of interest-bearing dollar assets.
Does the existence of non-tradable goods allow for deviations from Purchasing Power Parity? Answer: Yes the continuation of non-tradable goods permits deviations from Purchas
Q. The two deadweight triangles are the Production distortion and Consumption distortion losses. It is simple to understand why the Consumption distortion constitutes a loss for
New threats to an open trading system
Q. What is the real exchange rate between the dollar and the euro equal to? Answer: Let actual dollar/euro exchange rate q$/ENominal exchange rate E$/EPrice of an unchan
Q. Present the case for floating exchange rates. Answer: 1. Monetary policy autonomy Governments would able to use financial policy to reach internal and extern
1 Answer True or False. Brief explain your answer. No credit without explanation. a Bretton Woods. During the Bretton Woods system countries with large current account surpluses
Q. It is still the conventional wisdom in the U.S. that compliance with NAFTA needs is having a deleterious effect on U.S. highway safety standards, on U.S. pollution and other en
explain the newo clacical theory of international trede
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