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Q. Explain why under the gold standard a perpetual surplus or a perpetual deficit is impossible.
Answer: Since specie inflows drive up domestic prices and restore symmetry in the balance of payments any excess eventually eliminates itself. A shortage of currency direct to low domestic prices and a foreign payments surplus, and any deficit eventually eliminates itself.
Explain why Relative PPP is useful when comparing countries that base their price levels on different product baskets. Answer: For instance If the U.S price level increase by
Q. Discuss the effects of government deficits on the current account. Answer: A difficult and hard issue that during the Reagan administration the creation of twin deficits whe
Q. Discuss the different types of Letters of credit? Types: i. Revocable Letter of credit ii. Irrevocable Letter of credit iii. Deferred payment Letter of credit iv. Confirmed
The IMC strives to understanding patients' needs before understanding the markets. When patients arrive at IMC, they become part of a long tradition of distinguished health care. T
oppotunity cost theory of international trade.Explanation of the theory
Q. How mobile is Europe's labor force? Answer: Differences in culture and language discourage labour movements between European countries. Differences in regional unempl
What are the government's fiscal policy options for a recessionary gap caused by cost-push inflation? Use the aggregate demand-aggregate supply model to show the impact of these p
Q. "The H.O. model remains useful as a way to predict the income distribution effects of trade." Discus s. Answer: The Stolper-Samuelson theorem, one of the basic theorems ari
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
why is international trade important for south Africa?.
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