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Q. Why do governments prefer to avoid current account deficits that are too large? Answer: A current account debit may possibly pose no problem if the borrowed funds
How is the foreign exchange rate determined?
Q. Who are the major participants in the foreign exchange market? Answer: 1. Commercial banks 2. Corporations 3. Nonblank financial institutions 4. Central banks
what are the theories supporting protectionism
Q. What is the national income identity for a closed economy? Answer: Y = C + I + G.
Q. What do you think about international? Answer: A prescribed procedure whereby a country is able to seek international legal authorization to temporarily stop paying i
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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
what i deficit balance of payment.
Discuss the relationship between PPP and the Law of One Price. Answer: The law of one price is applies to individual commodities while Purchasing Power Parity applies to the g
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