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Q. "A monetary policy is not a policy tool under fixed exchange rates." Discuss.
Answer: It is True Under fixed exchange rates domestic asset transactions by the central bank is able to be used to alter the level of foreign reserves but not to influence the state of employment and output.
Q. Explain the issues involved with the Fed acting as a lender of Last Resort (LLR). Answer: On the one hand LLR make possible the Fed to avoid panic and disturbance to
Q. Is Europe an optimum currency area? Answer: Yes the area's economy is strongly integrated with its own: most EU members export as of 10 to 20 percent of their output
Critically evaluate the theory and outline the necessary assumptions for the theory to hold in it''s purest form
Q. The figure below shows the demand and cost functions facing a Brazilian Steel producing monopolist. If it were unable to export, and was constrained by its domestic market, wh
Q. "The balance of payments is always balanced." Discuss. Answer: True each international transaction automatically enters the balance of payments twice once as a debit and o
Q. Suppose both governments offer their respective company a $10 million subsidy. Answer: Mutually companies would enter the market as each one knows that regardless of the o
what are the limitation of comparative advantage?
To answer the following question, please refer to the figure below.Concentrating only at the lower left quadrant, discuss the relationship between the U.S. real money supply and th
Q. "Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lea
Q. Analyze the effects of devaluation on an economy. Answer: Devaluation basis a rise in output a rise in official reserves and an expansion of the money supply. A private cap
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