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Q. Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?
Answer: While a country's liabilities are in the form of debt it's fixed scheduled payments to creditors don't fall when its real income falls. This makes it complicated to honour the developing country's foreign obligation and may lead to default.
why is international trade important for south africa
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The Arguments for Flexible Exchange Rates
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Q. Using the AA - DD framework, compare the effects of a rise in real domestic money demand under flexible and under fixed exchange-rate regimes. Answer: Under floating an i
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