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Q. How can international trade in assets make both countries better off?
Answer: By permitting them to reduce the riskiness of the return on their wealth and by allowing the two parties to diversify their portfolios that is to divide their wealth among a wider spectrum of assets and therefore reduce the amount of money placed on one specific asset.
critically evaluate Adam Smith''s theory of absolute advantage,outlining the assumptions necessary for the theory to hold in its purest form.what are the criticisms of this theory
Q. Using an equation, explain why governments prefer to avoid excessive current account surpluses. Answer: This pursue from the national income identity S = CA + I which says
Q. What are the predictions of the PPP theory with regard to the real exchange rates? Answer: The real exchange rate among two countries is a broad summary measure of
Q. What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets? Answer: Will increase because of fear that foreign deposits in the United States wi
Q. Explain the Law of One Price. Give an example. Answer: The law of one price affirms that in competitive markets free of transportation costs and trade barriers ide
Ask questionQuestion 1: Compute various indicators of the state of the labour market using the following information. Please show all steps of your calculation. If you do not, you
explained with example
Q. What is the national income identity for a closed economy? Answer: Y = C + I + G.
Q. Why Study Fixed Exchange Rates? Answer: Four main reasons: • Managed Floating - Current monetary system is hybrid of floating rate and pure fixed systems fix
Explanation with critical appraisal
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