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Q. Why would you suggest to a government to use a floating exchange-rate regime?
Answer: Floating Exchange Rate is an exchange rate in which central banks don't intervene in foreign exchange market to fix rates. Reasons for Floating Exchange Rates are given below:
1 Monetary policy autonomy. 2 Symmetry. 3 Exchange rates as automatic stabilizers.
what are the alternative theories of trade?
Q. Neoclassical and Classical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources; and therefore is an op
Countries are indulged in trade because there are mutual gains from trade. But then, what are these gains which they obtain, and how are these realized? Comparative advantage theor
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. Show the effects of the reunification of eastern and western Germany in 1990 on both Germany and its neighbouring European countries using the AA - DD framework. A
what is international pricing method?
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
what you do understand by the term effective rate of protection
Q. Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997? Answer: By initiating a new currency and init
Q. Explain why under fixed exchange rate, monetary policy is ineffective whereas under floating exchange rate it is effective in rising output. Answer: In floating by purchasi
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