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Determine the term - hot money
A large 'hot money' inflow shifts the demand curve for currency to the right, leading to exchange rate rising and to an overvalued exchange rate in terms of trading competitiveness of the country's exports. The current account of balance of payments is then about to deteriorate. If there is a shortage to start with, the deficit will grow larger. A large 'hot money' outflow will lead to opposite result.
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Illustrate the circular flow of income and expenditure according to their models ( classical and keynesian)
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oced
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Imagine Adam Smith living in today's economic climate. Describe what current economic issues about which he might be most concerned with and state why?
multiplier static and dynamic
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