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Q. Describe the effects of the Smoot-Hawley tariff imposed by the United States in 1930.
Answer: It had a damaging consequence on employment abroad. The foreign response occupied retaliatory trade preferential and restrictions trading arrangements among a group of countries. This is an illustration of a "beggar-thy-neighbor" policy meaning a policy that benefits the home country only because it worsens economic conditions abroad.
Q. Explain why one can write the demand for money as follows: Md = P L (R, Y) Answer: The collective money demand is proportional to the price level. Imagine that every prices
Q. Explain why large interest rate differences would be strong evidence of unrealized gains from trade. Answer: The difference between offshore and onshore interest rates on
explain various gains from international trade
Q. One reason international trade has a powerful effect on the distribution of income within countries is that some factors are "specific", and therefore cannot move costlessly fr
part of the return on the investment comes from the asset itself and part from the currency of the foreign currency. agree or disagree?
Assume that Deborah Electronics expects a delivery of Fujitsu laptops in a month from a Japanese supplier. Each laptop sells at $1000 in a retail market whereas the import cost is
tion..What is the range of gross barter terms of trade ?
What will be the effects of an increase in real national income on the interest rate? Answer: An enhance in real national income will increase the interest rate. If investment
What are the government's fiscal policy options for a recessionary gap caused by cost-push inflation? Use the aggregate demand-aggregate supply model to show the impact of these p
Q. Explain why the FDIC is following a "too-big-to-fail" policy of fully protecting all depositors at the largest banks. Answer: It is a tricky question the FDIC does that even
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