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Q. Present the case for floating exchange rates.
Answer:
1. Monetary policy autonomy
Governments would able to use financial policy to reach internal and external balance. No country possible forced to import inflation and deflation from abroad.
2.Symmetry
The United States would no longer is able to set world monetary conditions all by itself. The United States would have the similar opportunity the same as other countries to influence its exchange rate against foreign currencies.
3. Exchange rates like automatic stabilizers.
The agonizing and long periods of speculation preceding exchange rate realignments wouldn't take place under floating.
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Q. What are the main lessons economists learned from the developing country crisis? Answer: 1. select the right exchange rate regime. 2. The central significance of
part of the return on the investment comes from the asset itself and part from the currency of the foreign currency. agree or disagree?
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Q. What do you think about international? Answer: A prescribed procedure whereby a country is able to seek international legal authorization to temporarily stop paying i
Q. In autarky, Country P was producing at point 5. With trade, could its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio
What exactly is IMF and why is it so important in helping Europe? How exactly does it help Europe and what effects does its help have on rest of the world?
TERMS OF TRADE MEANING AND NET BARTER TERMS OF TRADE MEANING TABLE DIAGRAM
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