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Q. Explain what a "vehicle currency" is. Why is the U.S. dollar considered a vehicle currency?
Answer: A vehicle currency is one specifically widely used to denominate international contracts made by parties who don't reside in the country that issues the vehicle currency. While 2001 ninety percent of foreign exchange transactions engross exchanges of foreign currencies for U.S. dollars so the dollar is considered a vehicle currency.
Porter Competitive Forces Model: Effectively dealing with the competitive forces that exist within its industry lead to a successful organization. The organization i
Q. Present the case against floating exchange rates. Answer: 1.The discipline obligatory on individual countries by a fixed rate would be lost. 2. Undermine specu
Q. 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 re
Q. Use a figure to study the following question: Consider that the economy is at a point on the DD-AA schedule that is above both AA and DD, where both the asset and output markets
Q. Why do governments prefer to avoid current account deficits that are too large? Answer: A current account debit may possibly pose no problem if the borrowed funds
explained with example
Q. How much trade do currency unions create? Answer: The major result is that currency unions promote trade. One study originate that on average two countries that are
how is exchange rate determined.
explain the newo clacical theory of international trede
Q. Discuss the effects of government deficits on the current account. Answer: A difficult and hard issue that during the Reagan administration the creation of twin deficits whe
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