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Q. What are the three types of gains from international transactions between the residents of different countries?
Answer:
1. Gains due to comparative benefit and economies of scale.
2. Gains because of inter-temporal trade which is the exchange of goods and services for claims to future goods and services which is for assets.
3. Gains because of trades of assets for assets such as the exchange of real estate located in London for U.S Treasury bonds.
distinguish between net terms of trade and gross terms of trade
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Q. Explain why a London Eurobank has a competitive advantage over a bank in New York in attracting dollar deposits. Answer: It is able to pay more because the London ba
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Brifly explaine the alternative explanation to the theory of international trade
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Q. "The balance of payments is always balanced." Discuss. Answer: True each international transaction automatically enters the balance of payments twice once as a debit and o
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