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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*.
Q. Explain why East Asian countries have done so well relative to South American countries. Answer: Generally the reasons are less moral hazard less government debt to forei
Us and European Foriegn Exchange Flow chart Answer: The figure explicate how the money markets of two countries are linked through the foreign exchange market. The financial
is general equilibrum in trade
Q . Now the monopolist discovers that it will export as much as it likes of its steel at the world price of $5/ton. It will thus expand for- export production up to the point whe
M. Porter competitive advantage theory
the New Trade Agenda
Q. Explain the advantage a and disadvantage of globalization? Advantages - 1. Economic growth 2. Lower cost 3. Improved availability of goods and services 4. Glob
ln?(?FDI?_t )=ln??(C)+? ln?(?CNGDP?_t )+ßln?(?GDP?_t ?)+a ln?(DIST)+fCAFTA+?_(1 ) ln?(?EXPORT?_t )+?_2 ln?(?GDPM?_t )+?_3 ln?(?CPI?_t )+?_4 ln?(?GDPA?_t )+e
Q. The U.S. is most probably the most open international market among the industrialized countries. What then does the U.S. have to took by joining the WTO? Answer: There ar
report writing for 1500 words
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