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Q. Explain the purpose of the following figure. Show the effects of German unification on Germany's interest rate.
Answer: The major purpose is to show that different interest rates exist for different assets since foreign currencies are different assets. From 1990 to 1995 the DM interest rate is elevated than that of the United States. Exclusive of this period the dollar rates are higher reflecting higher inflation in the United States and depreciating of the dollar versus the German currency.
Q. It is argued that import substitution is a misguided trade policy if the intent is to show long-term economic growth. Illustrate the reasons underlying this argument. Answe
Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi
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
alternative explanations to the theory of international trade.
Hospital Manager Function The manager of the hospital in IMC is responsible for many things: • Follow-up to the orderly conduct of work at the hospital to achieve high qual
what is leontiff paradox.
Q. Other things being equal, a rise in a country's terms of trade enhances its welfare. What could happen if we relax the ceteris paribus assumption, and allow for the law of dema
Present and explain the Fundamental Equation of the Monetary Approach. Answer: Suppose E $ /E = P US /P E and that domestic price levels depend on domestic money demands and
What is the significance of the observations made by OECD in this case study regarding “The OECD economies are more strongly dependent on the production, distribution and use of kn
Q. The effective rate of protection is a weighted average of nominal tariffs and tariffs on imported inputs. It has been noted that in most industrialized countries, the nomina
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