Foreign exchange market, International Economics

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how is exchange rate determined?

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Describe the economys short-run equilibrium, Q. Use the fixed exchange rate...

Q. Use the fixed exchange rate DD - AA model to describe the economy's short-run equilibrium.  Then, use the same figure to study an expansionary monetary policy. Show that the pol

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Is a depreciation of the dollar/euro exchange rate, Is a depreciation of th...

Is a depreciation of the dollar/euro exchange rate correlated with a decrease in the dollar return on U.S. deposits? Answer:  No, suppose that the Interest Parity is maintained

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Q. Explain why Relative PPP is useful when comparing countries that base their price levels on different product baskets. Answer: For instance If the U.S price level increase

Development by stabilisation & reform-lower income countries, Development t...

Development through stabilisation and reform can be understood as follows     The reasoning here was that the trade and resource transfer could not, by themselves, lift L

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