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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.
Explain how the money markets of two countries are linked through the foreign exchange market. Answer: The financial policy actions by the Fed affect the U.S. interest rate al
Q. Explain Critical Appraisal of Chamberlins theory? a. Chamberlin assumed that monopolist competitors act independently and their price manicuring goes unnoticed by the rival
what is this?.
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. Use the fixed exchange rate DD - AA model to describe the economy's short-run equilibrium. Then, use the same figure to study an expansionary monetary policy. Show that the pol
Vernon's product cycle theory
how is exchange rate determined?
Identify and explain the three basic economic question that the group of survivors will have to answer everyday
who looses from tarrif and quota?
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
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