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Q. Now, consider that the relative price of A is actually not higher than Albania's autarkic level of 1, but quite the opposite (e.g. PA/PB = 0.5). Could Albania still be able t
Q. 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
2. If a country's growth is biased in favor of its import, this should unequivocally improve its terms of trade and its economic welfare. Discuss. Answer: Suppose the Japan
Budget: An estimate of all anticipated revenue and expenditure of the government for the ensuing financial year is called budget. The budget of the state is a document contain
Q. What is the interest parity condition? Answer: The circumstance that the expected returns on deposits of any two currencies are equal when measured in the same currency is
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
Q. Discuss the benefits and costs of joining a fixed-exchange area. Answer: Benefits generally gains from the stability of the area and reduced uncertainty. The compete
what is the criticism of opportunity cost
under fleible exchange rate regime what are the consenquences of current account deficit and surplus
The law of reciprocal demand is different from the reciprocal demand curve?
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