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Q. Discuss studies based on the interest parity conditions.
Answer: Generally the formula doesn't hold and isn't a good predictor of future devaluations. Even poorer it failed to predict accurately even the direction in which the spot exchange rate would change.
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
International business involves the management of international risk. To minimize risks commercial parties utilize independent guarantees and standby letters of credit. (a) Dis
oppotunity cost theory of international trade.Explanation of the theory
Q. What do you think about international? Answer: A prescribed procedure whereby a country is able to seek international legal authorization to temporarily stop paying i
Q. What are the three types of transactions between the residents of different countries? Answer: 1. Trades of services and goods for goods or services. 2
Q. Explain why one can write the demand for money as follows: Md = P L (R, Y) Answer: The collective money demand is proportional to the price level. Imagine that every prices
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
In a day of production, firms in angola can produce 200 liters of oil or 10 kilograms of tungsten. Firms in Namibia can produce 160 liters of oil or 60 kilograms of tungsten. Which
What is the Fisher Effect? Provide an example. Answer: All moreover equal a rise in a country's expected inflation rate will ultimately cause an equal rise in the interest rat
Q. Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade
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