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Q. Present the case against floating exchange rates.
Answer:
1.The discipline obligatory on individual countries by a fixed rate would be lost.
2. Undermine speculation and money market disturbances.
3. Damages to investment and international trade.
4. A Clumsy economic policies.
5. The misapprehension of greater autonomy.
Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate? Answer: The labour component of the price of 1 is bigger than that of p
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Q. Neoclassical and Classical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources; and therefore is an op
Q. Use a figure to study the following question: Consider that the economy is at a point on the DD-AA schedule that is above both AA and DD, where both the asset and output markets
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Q. What are the factors affecting the demand for foreign currency? Answer: Three factors that affect the demand for foreign currency are risk, expected return, and liquidity.
Hepburn’s Speed Model, the coefficients of vehicles are indicated for C and D. As the chief of operations in your organization, you are responsible for presenting the yearly budget
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Q. Use the II - XX framework in order to show graphically how inflation can be imported from abroad unless exchange rates are adjusted. Answer: Suppose that the home economy is
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