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Q. What are the predictions of the PPP theory with regard to the real exchange rates?
Answer: The real exchange rate among two countries is a broad summary measure of the prices of one country's goods and services relative to the other's. PPP predicts that the actual exchange rate never permanently changes which is different from nominal exchange rates that deal with the relative price of two currencies
Q. Explain why under the gold standard a perpetual surplus or a perpetual deficit is impossible. Answer: Since specie inflows drive up domestic prices and restore symmetry in
Q. What explains the sharply divergent long-run growth patterns? Answer: It lies in the political and economic features of developing countries and the way these have
Q. Explain the purpose of the given figure? Answer: To demonstrate that spot and forward exchange rates are in general close to each other.
Explain the classical theory of employment with relaxed assumption?
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Special and Differential treatment
Q. Use the DD - AA model to examine and compare the response of an economy under fixed and floating exchange-rate regimes to a temporary fall in foreign demand for its exports.
explain the newo clacical theory of international trede
Q. "Trade liberalization could precede capital account liberalization." Discuss. Answer: It is probably true. The issue is associated to the theory of second best and
What are the International factor movements
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