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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 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
difference between classical and neo classical theory of international trade.
Q. What are the three types of gains from international transactions between the residents of different countries? Answer: 1. Gains due to comparative benefit and ec
THE SETTING Country X is blessed with large reserves of natural resources, spectacular physical landscape and a moderate climate. It is inhabited by a well educated and industrious
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Question 1 What are the advantages and disadvantages of trade blocs? Question 2 Identify and explain the various parameters of regional economic integration Question 3 D
what is ppp
Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate? Answer: The labour component of the price of 1 is bigger than that of p
Question : (a) Differentiate between Transaction, economic risk and Translation risk in foreign exchange market. (use an illustrative and numerical example in each case. (b)
Q. Explain the difference between the following two expressions: Y = C(Y d ) + I + G + CA(EP*/P, Y d ) and Y = C + I +G + CA Answer: The first expression corresponds to a
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