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Q. What is the domino effect or contagion?
Answer: The definition is the defencelessness of even seemingly healthy economies to crisis of confidence generated by events elsewhere in the world. Must provide examples like the Thai crisis which provoked another crisis in South Korea a much larger economy some 7,000 miles away Or the Russian crisis sparking huge speculation against the Brazil's real.
Q. Discuss the effects of ongoing inflation based on the PPP theory. Answer: Other things equivalent money supply growth at a constant rate eventually results in ongoi
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
Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate. Answer: The major points are: A raise in the European money supply will reduc
critically evaluate Adam Smith''s theory of absolute advantage,outlining the assumptions necessary for the theory to hold in its purest form.what are the criticisms of this theory
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
Discuss the effects of ongoing inflation based on the PPP theory. Answer: Other things equivalent money supply growth at a constant rate eventually results in ongoing price le
why is international trade important for south Africa?.
Q. Using the diagram, show what happens to the composition of production (that is quantity of cloth per 1 unit of food) in Australia once trade is established between the two coun
International monetary system
what is the nature of the proximity-concentration that firms have to deal with then making decision regarding foreign direct investment?
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