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Q. Describe the role of offshore banking and of offshore currency (eurocurrencies) trading. Answer : Both have mushroomed because of increased international trade inc
Q. The United States seems at times to have a totally schizophrenic attitude toward protectionism. The United States was the country that proposed the establishment of the World
Q . Consider that the relative capital abundance of Australia was so much greater than that of Sri-Lanka, that we would have to locate Australia far to the right on the K/L axis.
Q. The migration model of Todaro and Harris provided an important theoretical critique of the manufacturing-biased import-substitution trade-policy stance. Illustrate. Answer:
Does the existence of non-tradable goods allow for deviations from Purchasing Power Parity? Answer: Yes the continuation of non-tradable goods permits deviations from Purchas
Q. A naïve implication of the DD - AA framework is that either fiscal or monetary policy can lead to full employment. Discuss why this view is naïve. Answer: 1. Inflation m
Discuss the differences between Absolute PPP and Relative PPP . Answer: Absolute Purchasing Power Parity (PPP) states that the exchange rate between two currencies equals the
Special and Differential treatment
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
Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with a powerful logic (Rugman, 1981, 1985), it is still defici
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