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Q. Using a figure illustrate the simultaneous equilibrium of the foreign exchange and domestic money markets when the exchange rate is fixed at E0 and is expected to remain fixed at E0 in the future. Assume both P and Y is constants. Now, study the effect of an increase in income, Y.
Answer: The L(R*, Y) will shift down as well as to the right, which will require an increase in M to M2. This will necessitate the domestic central bank to purchase foreign assets and thereby increase the money supply leaving E at E0. Note that R = R* at the new balance as before.
Q. What is a country risk index? Explain the categories classified by business environment risk information The country risk index tries to incorporate the economic , geographi
Q. What are the main lessons economists learned from the developing country crisis? Answer: 1. select the right exchange rate regime. 2. The central significance of
Q. What is an SDR? Answer: An SDR abbreviation of Special Drawing Right at the IMF and holds a place as a world reserve currency some countries especially those that do
Is there is Few or many national currencies
habler oppurtunity cost
2. If a country's growth is biased in favor of its import, this should unequivocally improve its terms of trade and its economic welfare. Discuss. Answer: Suppose the Japan
Q. What do you mean by Public Expenditure? The central governments have the responsibility of implementing various developmental programmes and bring about economic and social
different between her barter terms of trade and net barter terms of trade
A vast body of literature has been dedicated to the study of social support and satisfaction. Social support is commonly viewed as one of the most important concepts of close pers
Using the Heckscher-Ohlin model, discuss how the differences in supply and demand conditions between countries create a basis for trade.
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