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Q. Show the effects of the reunification of eastern and western Germany in 1990 on both Germany and its neighbouring European countries using the AA - DD framework.
Answer: For Germany this was a period of rumble with high interest rates to fight inflation. Erstwhile European countries like Italy UK, and France were in recession trying to match the high German interest rates to hold their currencies fixed against Germany's thus pushing their economies into deep recession. Other European countries strive to continue the fixed exchange rate in order not to lose the credibility they had built up since 1985. The policy clash among Germany and the other European countries led to a series of fierce speculative harass on the EMS exchange parities starting in September 1992. By August 1993 the EMS was forced to move away to very wide (+- 10 percent) bands which was kept in force until the introduction of the euro in 1993.
Q. Suppose Airbus is set to give the aircraft before Boeing. Which company will enter the market? Answer: Boeing will not and Airbus will produce.
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Q. If scale economies were not only external to firms, but were also external to individual sites. That is, the larger the worldwide industry (regardless of where plants or firms
Us and European Foriegn Exchange Flow chart Answer: The figure explicate how the money markets of two countries are linked through the foreign exchange market. The financial
Q. It can be argued that Japan's explicit promotion of its microchip industry was an excellent paradigm of successful industrial policy. What criteria could you apply to calculat
Q. Suppose both governments offer their respective company a $10 million subsidy. Answer: Mutually companies would enter the market as each one knows that regardless of the o
In the International Medical Center, clients are patients who use the services provided by the hospital, such as the health program, preventive services, and surgery. Other custom
Q. What is an SDR? Answer: An SDR abbreviation of Special Drawing Right at the IMF and holds a place as a world reserve currency some countries especially those that do
The Arguments for Flexible Exchange Rates
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