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Q. Discuss the problems that the EMU will face in the coming years.
Answer: Europe isn't an optimum currency area so asymmetric economic developments within different countries of the euro zone that call for different interest rates can't be implemented. The political part of the confederacy is much weaker and may limit the political legitimacy of the economic unification. On the one hand labour markets stay remains highly unionized and subject to high government unemployment taxes and other regulations impeding labour mobility. On the other side capital has high inducement to migrate to the EMU countries with the lowest wages. Constraints on national monetary policy are likely to be painful due to the nonexistence of substantial fiscal federalism fiscal transfer of resources from the rich to the less rich countries within the European Union. The EU is considering a major expansion of its membership into Eastern Europe and the Mediterranean. This will cause several coordination costs and as well the issue of representation of small and big countries.
een subject to a discrimination complaint as a result of their recent recruitment campaign- They told the recruitment agency that they were looking for ‘young women with flair'' to
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Q. An export subsidy has the reverse effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the
what is scope of international economics
Q. Why Study Fixed Exchange Rates? Answer: Four main reasons: • Managed Floating - Current monetary system is hybrid of floating rate and pure fixed systems fix
Q. Using figures for both the short run and the long run, show the effects of a permanent increase in the U.S. money supply. Try to line up your figures to the short and long run
Q. Is Europe an optimum currency area? Answer: Yes the area's economy is strongly integrated with its own: most EU members export as of 10 to 20 percent of their output
Why we Devising an International Monetary System
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International Capital Mobility is explained below: The case for the international capital mobility was most evidently articulated by MacDougal in 1960. He presented a framework
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