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Q. Why Study Fixed Exchange Rates?
Answer: Four main reasons:
• Managed Floating - Current monetary system is hybrid of floating rate and pure fixed systems fixed exchange rates give insight to effects of foreign exchange intervention under floating rates.
• Regional Currency Arrangements - Exchange rate unions subsist where member nations fix mutual exchange rates.
• Developing Countries and Countries in Transition- Almost half the world connect in currency pegging.
• Lessons of Past - Fixed exchange rates were the standard in several historical periods many economists propose resurrection of some fixed rate system.
Q. One reason international trade has a powerful effect on the distribution of income within countries is that some factors are "specific", and therefore cannot move costlessly fr
Q. The United States, as it began its long and unbeaten growth in the early 19th Century, consciously promoted domestic production through such activities as tariffs, Clay's Ameri
Q. Why would you suggest to a government to use a floating exchange-rate regime? Answer: Floating Exchange Rate is an exchange rate in which central banks don't inter
how is exchange rate determined.
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Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with a powerful logic (Rugman, 1981, 1985), it is still defici
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Q. Use the II - XX framework in order to show graphically how inflation can be imported from abroad unless exchange rates are adjusted. Answer: Suppose that the home economy is
A good analysis in increasing cost theory with graphical analysis
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