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Q. Compare currency board to conventional fixed exchange rate?
Answer: Currency board mayn't acquire domestic assets and therefore cannot lend currency freely to domestic banks in time of financial crisis. As well limit government ability to "surprise" the market and have real devaluation.
Q. Given the opportunity to sell at world prices, the marginal (opportunity) cost of selling a ton domestically is what? Answer: $5/ton.
Q. Explain the following figure: Answer: The figure depict the effect of a permanent increase in the money supply starting from full employment equilibrium. Subsequent to the i
explain the basis for international trade
what is the criticism of opportunity cost
Q. "No country is abundant in everything." Discuss. Answer: the idea of relative (country) factor abundance is (like factor intensities) a relative concept. When we recogniz
Q. How did the international monetary system influence macroeconomic policy-making and performance during the interwar period (1918 - 1939)? Answer: Governments efficiently sus
HOW TERMS OF TRADE IS DETERMINED
what is the free trade
To answer the following question, please refer to the figure below.Concentrating only at the lower left quadrant, discuss the relationship between the U.S. real money supply and th
Q. Using the AA - DD framework, compare the effects of a rise in real domestic money demand under flexible and under fixed exchange-rate regimes. Answer: Under floating an i
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