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Q. Explain how the AA schedule is derived. Answer: For a fixed real money supply an enhancement in output leads to an increase in the domestic interest rate. In the foreign e
Q. Who are the main actors in the international capital market? Answer: 1. Commercial banks. 2. Corporations. 3. Non-bank financial institution
Q. Other things being equal, a rise in a country's terms of trade enhances its welfare. What could happen if we relax the ceteris paribus assumption, and allow for the law of dema
Us and European Foriegn Exchange Flow chart Answer: The figure explicate how the money markets of two countries are linked through the foreign exchange market. The financial
Q. How A Central Bank Fixes the Exchange Rate? Answer: The Central bank should always be willing to trade currencies at the fixed exchange rate with the private actors in the f
Q. "A monetary policy is not a policy tool under fixed exchange rates." Discuss. Answer: It is True Under fixed exchange rates domestic asset transactions by the centr
Hello, I rent an appartment in Brazil, a country known for its high inflation rates, but I live in Switzerland. Does this mean when I exchange Reais to Swiss Francs (in a +- consta
Q. Consider, as a result of several dynamic factors associated with exposure to international competition, Albania's economy grew, and is now shown by the rightmost production pos
Q. Describe the crisis in Russia starting from 1989. Explain why? Answer: Must emphasize lack of tax collection, legal system, corruption, organized crime, inflation, seigni
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