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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.
Why Adam Smith theory cannot be applicable?
Q. "Bank failure may not be limited to banks that have mismanaged their assets." Explain why. Answer: A sound bank countenanced with the wholesale loss of deposits is likely to
Calculate the doublefactoral terms of trade (TD), formulated by Jacob Viner based on following information: Suppose in the base year of 2015, Px= 100, Pm= 100, Zx= 100, Zm= 100and
Q. "Given that labor remains relatively immobile within Europe, the European Union's success in liberalizing its capital flows may have worked perversely to worsen the economic sta
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Q. Explain why after, say Norway unilaterally pegs the krone to the euro, domestic money market disturbances will no longer affect domestic output despite the continuation of float
Open Cities & Open Coastal Areas: like the Sezs, aimed at attracting foreign investments and technology. They are : Dalian (Liaoning province); Qinhuangdao (Hebei), Tianjin, Yant
Q. Using the diagram, show what happens to the composition of production (that is quantity of cloth per 1 unit of food) in Australia once trade is established between the two coun
theory of opportunity cost?
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