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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 are channeled into productive domestic investment projects that pay for themselves with the revenue they generate in the future. Though sometimes large current account deficits represent temporarily high consumption resulting from misguided government policies or some other malfunctioning of the economy occasionally the investment projects that draw on foreign funds may be badly planned and so on. In such cases the government strength wish to reduce the current account deficit immediately rather than face problems in repaying its foreign debt in the future.
Q. The following table introduces the relationship between wholesale price index and industrial production changes between the years 1929 - 1935. What is the purpose of the given
Q. What explains the nearly universal scope of the Great Depression? Answer: The international gold typical played a central role in starting deepening and spreading the Great
Opportunity cost theory
Q. Explain the purpose of the following figure. Show the effects of German unification on Germany's interest rate. Answer: The major purpose is to show that different i
Q. Presumably, since the United States is a large country in many of its international markets, a positive optimum tariff exists for this country. It follows thus that when any l
Q. An export subsidy has the reverse effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the
Q. What is the Fisher Effect? Provide an example. Answer: All moreover equal a rise in a country's expected inflation rate will ultimately cause an equal rise in the i
1. Species that have reached the extinction threshold and are on the verge of extinction – beluga whales, African elephants, mountain gorillas and the California condor might be cl
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What are floating rate notes? Explain the various types of FRNS FRNs are bonds that do not carry a fixed rate of interest. The various forms of FRNs are : Perpectual FRN Minmax
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