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Q. Explain why the EMS countries decided to fix their exchange rates against the German DM?
Answer: In this manner the other EMS countries in effect imported the credibility of the German central bank in fighting inflation therefore discouraging the development of inflationary pressures at home.
#question.suppose that France has a trade surplus with the United Kingdom. What would you expect to happen to price, wages, and commodity price in France? why? What would happen to
Question: Banks contribute to the economic development of a country. Banks have always been financing projects that help individuals and enterprises fulfill their plans. Howev
is the stolper samulson theorem is relevant in these days
Q. How A Central Bank Fixes the Exchange Rate? Answer: The Central bank should always be willing to trade currencies at the fixed exchange rate with the private actors in the f
Q. In autarky, Country P was producing at point 5. With trade, could its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio
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. What do you think about dollarization? Answer: The respond is almost certainly a bad idea unless in the very short run. It must talk about the loss of seigniorage a
Q. Using a figure, show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run. Answer: A t
Q. Presumably, since the United States is a large country in many of its international markets, a positive optimum tariff exists for this country. It follows thus that when any l
why is international trade important for south Africa?.
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