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Critically evaluate the classical theory of international trade
Q. What is the interest parity condition? Answer: The circumstance that the expected returns on deposits of any two currencies are equal when measured in the same currency is
Q. Countries do not in fact export the goods the H.O. theory predicts. Discuss. Answer: This statement isn't true that though one may find several cases where it seems to be
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The law of reciprocal demand is different from the reciprocal demand curve?
HOW TERMS OF TRADE IS DETERMINED
Q. An export subsidy has the reverse effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the
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.
Critically evaluate the theory and outline the necessary assumptions for the theory to hold in it''s purest form
Explanation with critical appraisal
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