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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.
what is world trade
Q. What are the predictions for the long run of the Monetary Approach? Answer: Money supplies- Known the equations E $/E = P US /P E P US = M S US /L(R $
Q. Suppose the U.S. government (but not Europe) offers a $10 million subsidy? Answer: In this case Airbus would make a decision not to enter the market since it knows Boeing
Q. In recent cases, the U.S. placed quotas or protectionist tariffs on imported microchips and imported steel. In both cases the damage to "downstream" industries was obvious to
Q. What are the three types of transactions between the residents of different countries? Answer: 1. Trades of services and goods for goods or services. 2
Q. Present and explain the Fundamental Equation of the Monetary Approach. Answer: Suppose E$/E = PUS/PE and that domestic price levels depend on domestic money demand
Q. Based on the case study, answer the following question: Can currency boards make fixed exchange rates credible? Answer: No for the reason that is prohibited by law from a
Q. How can long-run values in the real exchange rate change? Answer: A elevate in world relative demand for U.S output origins a long-run real appreciation of the dollar
oppotunity cost theory of international trade.Explanation of the theory
Q. What is the real exchange rate between the dollar and the euro equal to? Answer: Let actual dollar/euro exchange rate q$/ENominal exchange rate E$/EPrice of an unchan
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