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Q. If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at E 0 ? An
By Using the figures for both the short run and the long run graphs, Demostrate the effects of a permanent increase in the U.S. money supply Economy. Try to line up your figures t
What are the International factor movements
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 the reason
Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with a powerful logic (Rugman, 1981, 1985), it is still defici
Q. Describe alternative forms of capital inflow to finance external deficits and explain why these methods were used in different times? Answer: The capital inflows to facili
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Q. What are the main factors determining the aggregate money demand? Answer: Three major factors: the price level, interest rate and real national income. A increase i
How to derive offer curve and its difference from reciprocal demand curve
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