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Q. Why is it useful to make a distinction between debt and equity instruments?
Answer: Debt instruments such as bank deposits and bonds are repaid regardless of economic circumstances. Equity instruments for example a share of stock have a payoff that is linked to economic performances. Though remember the possibility of bankruptcy and the real return which is subject to domestic currency fluctuations.
Q. Using 4 different figures, plot the time paths showing the effects of a permanent increase in the United States money supply on: A. U.S. money supply. B.
Opportunity cost theory
Q. Explain why the exchange rate model based on PPP is a long-run theory. Answer: PPP theory is a financial approach to the exchange rate. It is a long-run theory for
Q. It can be demonstrated that any protectionist policy, which effectively shifts real resources to import competing sector or industry, will harm export industries or sectors. T
Q. Why would you suggest to a government to use a floating exchange-rate regime? Answer: Floating Exchange Rate is an exchange rate in which central banks don't inter
How do countries gain under the increasing cost assumptions
briefly summaries the alternative explanation to the theory of international trade?
Q. How did the international monetary system influence macroeconomic policy-making and performance during the gold standard era (1870 - 1914)? Answer: London was the hub of t
what do you understand by (reciprocal demand)offer curve
Q. What are the three types of gains from international transactions between the residents of different countries? Answer: 1. Gains due to comparative benefit and ec
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