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Q. Imagine that the economy is at a point on the DD-AA schedule that is above both AA and DD and where both the output and asset markets are out of equilibrium. Explain what will happen next.
Answer: Since the asset market adjusts extremely quickly the exchange rate drops immediately to a point on the AA schedule and there will be excess demand for the domestic currency because the high expected future appreciation rate of the domestic currency implies that the expected domestic currency return on foreign deposits is below that on domestic deposits. This surplus demand escorts to an immediate fall in the exchange rate.
What is Tugend''s stance toward the practice of multitasking? Point out specific phrases that reveal her attitud. How appropriate is her stance, given her subject matter?
Lot of
Financial Resources: The first investor is the Fitaihi Company under the leadership and technical and medical assistance of Dr. Walid Fitaihi, who was then joined by other investo
Q. Even though it is very clear in the context of the Specific Factors model that an expansion of international trade will make losers as well as winners, economists still claim t
Q. Explain the Law of One Price. Give an example. Answer: The law of one price affirms that in competitive markets free of transportation costs and trade barriers ide
give notes on the alternative theories to trade
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Q. Explain the issues involved with the Fed acting as a lender of Last Resort (LLR). Answer: On the one hand LLR make possible the Fed to avoid panic and disturbance to
explain the basis for international trade
Importance of International Trades : The basis of international trade is to be found in the diversity of economic resources in different countries. All countries have not been end
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