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Q. Suppose both governments offer their respective company a $10 million subsidy.
Answer: Mutually companies would enter the market as each one knows that regardless of the other's decision it will make some profit here.
Question 1: The main challenge facing governments in the 21st century revolves around containing and/or downsizing of public spending. Explain why reduced government interventi
Q. What has been learned since 1973 with regard to the experience with floating exchange rate regime? Answer: 1. Monetary policy autonomy: Yes though floating rate didn
Q. Explain why under fixed exchange rate, monetary policy is ineffective whereas under floating exchange rate it is effective in rising output. Answer: In floating by purchasi
What effect do non-tradable goods have on PPP? Answer: The consequence is quite substantial. In 1997 the production of non-tradable goods accounted for about 55% of U.S GNP.
Q. Explain Tobin's idea of "Don't put all your eggs in one basket." Answer: The idea of diversification advanced with Tobin in his Attitude Towards Risk as well as Por
Vernon's product cycle theory
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.
Why we Devising an International Monetary System
Revisions of Conventional Trade Theory
Explain the Financial Revolution and Monetary Affairs
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