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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 why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade
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Question: Tire Co Ltd, a Mauritian company, is engaged in the import and distribution of tyres from TZ Co Ltd established in Mozambique. Tire Co Ltd trades since 10 years under
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Q. Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate. Answer: The major points are: A raise in the European money supply will re
difference between classical and neo classical theory of international trade.
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illustrate the circular flow of income of an open economy and explain the effects of various injections and withdrawal in the circular flow?
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