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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 E0?
Answer: No this is for the reason that the domestic interest rate would begin to rise above R*. Traders in the foreign exchange market would start to bid up the price of domestic currency in terms of foreign currency. In the deficiency of central bank intervention the exchange rate thus would fall below E0 so as to prevent this appreciation the central bank should sell domestic currency and buy foreign assets thus increasing the money supply and preventing any excess money demand from pushing the home interest rate above R*.
It is argued that a tarriff may help promote employment in a single industry, but is not likely to help employment in general
Q. Use the diagram below taken from Figure 4-4 to identify the pre-trade situation for Australia and Sri-Lanka. Where on the K/L axis will you search each of the two countries? W
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the year of alternative / new trade theoriess
How much Debate over the MNC and the Nations State
I am writing a paper on dependancy theory in Ghana and I am having trouble understanding the basics of peripheral capitalism.
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