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Q. Consider how the United States' balance of payments accounts are affected when U.S. banks give two billion in debt owed to them by the government of Argentina.
Answer: In this case the United States builds a two billion dollars capital transfer to Argentina which must appear as a negative two billion dollar entry in the capital account. The linked credit is in the financial account in the form of a two billion dollar reduction in U.S. assets supposed abroad that is a net asset "export" and so a positive balance of payments entry.
Q. Why do governments prefer to avoid excessive current account surpluses? Or, why are growing domestic claims to foreign wealth ever a problem? Answer: On behalf of a given l
discuss the central economic problem facing this group of survivors.
Q. It has been claimed that the Chinese burst of modernization which has been propelling its manufactured exports throughout the world at an unprecedented rate, is made possible b
Q. Explain why after, say Norway unilaterally pegs the krone to the euro, domestic money market disturbances will no longer affect domestic output despite the continuation of float
Q . While selling exports it could also maximize its domestic sales by equating its marginal (opportunity) cost to its marginal revenue of $5. How much steel could the firm sell
Q. It is claimed that the persistence of protectionism is often the result of the fact that those who lose from trade are usually a much more informed, cohesive and motivated a gr
Financial analysis : To deeply understand the Lenovo's performance for recent years, we get more details on its financial figures (1) compare with the industry averages (2). The fo
Q. Why are prices of factors of production not equalized? Answer: Again this statement may not or may be argued to be true. On the other hand, the growth and large volume in
Special and Differential treatment
Explain Purchasing Power Parity. Answer: PPP ( ) states that the exchange rate between two countries' currencies equals the ratio of the countries' price levels. A decr
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