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Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affe
Q. It can be argued that Japan's explicit promotion of its microchip industry was an excellent paradigm of successful industrial policy. What criteria could you apply to calculat
Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi
what is scope of international economics
Q. In Foreign and Home there are two factors of production, land and labor, used to produce only one good. The land supply in each country and the technology of production are ex
Q. Analyze the effects of devaluation on an economy. Answer: Devaluation basis a rise in output a rise in official reserves and an expansion of the money supply. A private cap
what is the criticism of opportunity cost
Q. "Under floating rates, the economy is more vulnerable to shocks coming from the domestic money market." Discuss. Answer: It is true statement, under floating rates an incr
Q. Why is it that an industry is performing under conditions of domestic internal scale economies (applies to firm in the country) - then the resultant equilibrium can't be consis
What is the integration of RM in the international economic structures
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