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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.
The Concept of Comparative Advantage is explained below: To illustrate the concept of the comparative advantage, we take the instance of two equi-sized equi-endowment countries
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Canadian consumers have 50 dollar in come this is eual to the gross domestic product. they spand 35 dollars on comuser goods (25 on canadian goods annd 10 on imports) they save 8
Q . Now the monopolist discovers that it will export as much as it likes of its steel at the world price of $5/ton. It will thus expand for- export production up to the point whe
Why Adam Smith theory cannot be applicable?
How is the foreign exchange rate determined?
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