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Q. What can one learn from the following figure?
Answer: The figure shows the U.S. current account as well as net foreign wealth from 1977 until 1996. It illustrate that a string of current account deficits in the 1980s reduced America's net foreign wealth until by the end 1996 the country had accumulated a substantial net foreign debt. In 1987 the country turns into a net debtor to foreigners for the first time since World War I.
Q. Explain the credibility theory of the EMS. Answer: In this approach the other EMS countries in effect imported the credibility of the German central bank in fightin
what is scope of international economics
Q. Several argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one part to another, protected or preferred o
Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e
what do you understand by (reciprocal demand)offer curve
Explanation with critical appraisal
Q. "Even under flexible exchange rate regime, governments should not be indifferent to the behavior of inevitably and exchange rates surrendered some of their policy autonomy in o
#question.suppose that France has a trade surplus with the United Kingdom. What would you expect to happen to price, wages, and commodity price in France? why? What would happen to
THE SETTING Country X is blessed with large reserves of natural resources, spectacular physical landscape and a moderate climate. It is inhabited by a well educated and industrious
"Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lead t
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