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Q. Explain the phenomenon of capital flight.
Answer:
The reserve defeat accompanying a devaluation scare is habitually labeled capital flight for the reason that the associated debt in the balance of payments accounts is a private capital outflow. Capital flight may perhaps force the central bank to devalue sooner and by a larger amount than planned for the reason that the central bank's reserves are low to begin with.
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 occu
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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 argued that Japan's explicit promotion of its microchip industry was an excellent paradigm of successful industrial policy. What criteria could you apply to calculat
Q. Use a figure to study the following question: Consider that the economy is at a point on the DD-AA schedule that is above both AA and DD, where both the asset and output markets
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