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Q. What are the three main reasons why governments sometimes chose to devalue their currencies?
Answer:
1. Permit the government to fight domestic unemployment despite the lack of effective monetary policy.
2. Get better the current account.
3. Raise foreign reserves held by the central bank.
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
difference between differencial treatment in reverse andspecial and differencial treatment
Countries are indulged in trade because there are mutual gains from trade. But then, what are these gains which they obtain, and how are these realized? Comparative advantage theor
Q. What is a country risk index? Explain the categories classified by business environment risk information The country risk index tries to incorporate the economic , geographi
Q. Explain the difference between the following two expressions: Y = C(Y d ) + I + G + CA(EP*/P, Y d ) and Y = C + I +G + CA Answer: The first expression corresponds to a
What is mean by opportunity cost model of haberler international treade
Q. What are the reasons for the world as a whole running a substantial current account deficit? Answer: This deficit improved sharply in the early 1980s and has remained high.
Q. Discuss the costs and benefits of FDI to host country? Benefits to host country Availability of scarce factors of production Improvement in the balance of payment Strengthen
Habrrler''s oppirtunity cost theory
Q. Explain the effects of a permanent increase in the U.S. money supply in the short run and in the long run. Assume that the U.S. real national income is constant. A raise in
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