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Theory of reciprocal demand
Q. Explain why one can write the demand for money as follows: Md = P L (R, Y) Answer: The collective money demand is proportional to the price level. Imagine that every prices
Q. Should the IMF be abolished? Discuss. Answer: Arguments for eliminating the IMF must mention moral hazard and insistence on high interest rates and hasty structural
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
Illustration of reciprocal demand through example
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Q. What has been learned since 1973 with regard to the experience with floating exchange rate regime? Answer: 1. Monetary policy autonomy: Yes though floating rate didn
how to determine free trade for small country
Q. The effective rate of protection is a weighted average of nominal tariffs and tariffs on imported inputs. It has been noted that in most industrialized countries, the nomina
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