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Q. How and why did Europe set up its single currency?
Answer: The why part of the question is associated to large fluctuations in the exchange rates between the European countries disturbed trade. As well one of the major reasons was to design a way to prevent future world war. The how part of the question is associated to the fall down of Breton woods and the European Currency reform of 1969-1978. The Werner Report of 1971 set up a three-phase program to lead to the EMU.
distinguish between net terms of trade and gross terms of trade
In the Ricardian analysis, why does each trading partner have an incentive to produce at an endpoint of its production-possibility frontier? Why are prices of factors of production
Q. What are the three main reasons why governments sometimes chose to devalue their currencies? Answer: 1. Permit the government to fight domestic unemployment despite the
Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate? Answer: The labour component of the price of 1 is bigger than that of p
WHY IS INTERNATIONAL TRADE IMPORTANT FOR SOUTH AFRICA
Q. What are the reasons for the world as a whole running a substantial current account deficit? Answer: This deficit improved sharply in the early 1980s and has remained high.
Q. Use a figure to study the following question: Consider that the economy is at a point on the DD-AA schedule that is above both AA and DD, where both the asset and output markets
Q. The Heckscher-Ohlin model is famous for being elegant and mathematically sophisticated, yet failing to define reality. One manifestation of this fact is Trefler's Case of Missi
Q. Factor-intensity reversals define a situation in which the production of a product can be land-intensive in one country, and relatively labor intensive in another ( at given re
How to calculate effective rate of protection
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