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Q. What are the reasons for the world as a whole running a substantial current account deficit?
Answer: This deficit improved sharply in the early 1980s and has remained high. The major reasons are statistical discrepancies of timing factors, national accounts while the major factor is the systematic misreporting of international interest income flows. Ever since the world interest rates raised sharply after 1980 the size of the world interest payment discrepancy increased with them. Additionally much of the world's merchant shipping fleet is registered in countries that don't report maritime freight earnings to the IMF which collects these data.
Q. Using a figure illustrate the simultaneous equilibrium of the foreign exchange and domestic money markets when the exchange rate is fixed at E0 and is expected to remain fixed a
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Q. In 1986, the price of oil on world markets dropped sharply. Since the United States is an oil-importing country, this was widely regarded as good for the U.S. economy. Yet in
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Q. Contrast the crisis in Poland and Russia. Explain why the Polish economy has done better? Answer: With the end of the 1990s a handful of East European economies including
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Q. Several argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one part to another, protected or preferred o
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