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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. What are the predictions of the PPP theory with regard to the real exchange rates? Answer: The real exchange rate among two countries is a broad summary measure of
Q. Explain why the dollar of the United States became the postwar world's key currency. Answer: 1. The untimely convertibility of the U.S dollar in 1945. 2.
Q. Explain the following figure: Answer: The figure depict the effect of a permanent increase in the money supply starting from full employment equilibrium. Subsequent to the i
Are tariffs harmful are necessary to maintain fair trade?
The East Asian financial crisis
Q. Using a figure illustrate the simultaneous equilibrium of the foreign exchange and domestic money markets when the exchange rate is fixed at E0 and is expected to remain fixed a
what are the limitation of comparative advantage?
Q. If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at E 0 ? An
Q. Even though it is very clear in the context of the Specific Factors model that an expansion of international trade will make losers as well as winners, economists still claim t
Explanation of haberler opportunity cost with diagrams
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