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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.
Q. Explain how the AA schedule is derived. Answer: For a fixed real money supply an enhancement in output leads to an increase in the domestic interest rate. In the foreign e
Explanation with critical appraisal
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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?
Q. What are the main factors determining the aggregate money demand? Answer: Three major factors: the price level, interest rate and real national income. A increase i
the difference between offer curve analysis ,absolute and comparative advantage model
Q. Compare currency board to conventional fixed exchange rate? Answer: Currency board mayn't acquire domestic assets and therefore cannot lend currency freely to domesti
Q. What are the main lessons economists learned from the developing country crisis? Answer: 1. select the right exchange rate regime. 2. The central significance of
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.
Question 1: (a) To what extent does the structural change model of Lewis adequately portrays the development phases in most developing countries? (b) Discuss the principal a
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