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Q. Explain why a London Eurobank has a competitive advantage over a bank in New York in attracting dollar deposits.
Answer: It is able to pay more because the London bank isn't subject to any reserve requirements (neither American nor British) where the New York bank is subject to U.S reserve requirements.
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Q. Explain the purpose of the following figure. Show the effects of German unification on Germany's interest rate. Answer: The major purpose is to show that different i
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