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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.
explained with example
Postwar trade theory
Q. It is probable that trade based on external scale economies can leave a country worse off than it could have been without trade. Illustrate how this could happen. Answer:
Q. What are the three types of gains from international transactions between the residents of different countries? Answer: 1. Gains due to comparative benefit and ec
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. Describe the crisis in Russia starting from 1989. Explain why? Answer: Must emphasize lack of tax collection, legal system, corruption, organized crime, inflation, seigni
Q. One reason international trade has a powerful effect on the distribution of income within countries is that some factors are "specific", and therefore cannot move costlessly fr
Q. What can one learn from the following figure? Answer: The figure shows the U.S. current account as well as net foreign wealth from 1977 until 1996. It illustrate that a
why is international trade important for south africa
Q. The Specific Factors model makes a distinction between general-purpose factors that can move between sectors and factors that are specific to particular uses. How do difference
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