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Q. Explain why it may make sense for the United States, Japan, and Europe to allow their mutual exchange rate to float? Answer: Even though these regions trade amid each other
Q. Present and explain the Fundamental Equation of the Monetary Approach. Answer: Suppose E$/E = PUS/PE and that domestic price levels depend on domestic money demand
Q. What are the main factors determining the aggregate money demand? Answer: Three major factors: the price level, interest rate and real national income. A increase i
Q. Why do governments prefer to avoid current account deficits that are too large? Answer: A current account debit may possibly pose no problem if the borrowed funds
Critically evaluate the theory and outline the necessary assumptions for the theory to hold in it''s purest form
Q. What is the policy of sterilization? Give an example. Answer: • Untainted foreign exchange intervention - policy by which central banks perform equal foreign
Q. Explain why, according to Feldstein and Horioka, one should expect that domestic investment rates diverge widely from saving rates. Answer: The decisions of corporations t
Impact of the Project on the External Economic Environment International Medical Center will significantly affect the external economic environment in different aspects: • Th
Q. Explain what a "vehicle currency" is. Why is the U.S. dollar considered a vehicle currency? Answer: A vehicle currency is one specifically widely used to denominate inter
International relations (IR) is the study of relationships among countries, including the roles of states, inter-governmental organizations (IGOs), international nongovernmental or
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