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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.
Q. "It is in the interest of each depositor to withdraw her money from a bank if all other depositors are doing the same, even when the bank's assets are sound." Discuss. As par
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Q. How did the international monetary system influence macroeconomic policy-making and performance during the post-World War II years during which exchange rates were fixed under t
Q. The Metzler Paradox is a special case of the optimum tariff idea. Discuss this assertion. Could the optimum tariff tend to be a high one or a low one in the case where this p
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Q. One of the usually used assumptions in deriving the Heckscher-Ohlin model is that tastes are homothetic, or that if the per capita incomes were the similar in two countries, th
What exactly is IMF and why is it so important in helping Europe? How exactly does it help Europe and what effects does its help have on rest of the world?
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International relations (IR) is the study of relationships among countries, including the roles of states, inter-governmental organizations (IGOs), international nongovernmental or
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