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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 purchasing domestic assets the central bank cause an initial excess supply of domestic money that concurrently pushed the domestic interest rate downward and weakens the currency. Though under fixed exchange rate the central bank will oppose any tendency of the currency to depreciate by selling foreign assets for domestic money and consequently removing the initial excess supply of money its policy move has caused.
Q. If scale economies were not only external to firms, but were also external to individual sites. That is, the larger the worldwide industry (regardless of where plants or firms
Q. What is the national income identity for a closed economy? Answer: Y = C + I + G.
Identify and explain the three basic economic question that the group of survivors will have to answer everyday
critically examine the effects of tariffs on the level of employment and income distribution.
1.concepts of terms of trade,factors affecting terms of trade. 2.gross & net barter terms of trade. 3.terms of trade & economic development
Q. Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997? Answer: By initiating a new currency and init
Q. What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets? Answer: Will increase because of fear that foreign deposits in the United States wi
Q. Explain how the German Bundesbank gained its low-inflation reputation. Answer: Essentially Germany's experience with hyperinflation in the 1920s and yet again aft
Q. The Specific Factors model clearly illustrates how the expansion of trade can have significant distributional effects on the relative incomes of different factors of productio
review the general equilibrium conditions under autarky and given free trade using the opportunity cost theory of trade
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