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q discuss the values of private saving in closed and open economiesanswer in the closed economy private saving sp is equal to i g - t and in an open
q discuss the effects of government deficits on the current accountanswer a difficult and hard issue that during the reagan administration the
q what types of international transactions are recorded in the balance of payment accountsanswer three kinds transactions that involve exports and
q the balance of payments is always balanced discussanswer true each international transaction automatically enters the balance of payments twice
q the balance of payments accounts seldom balance in practice discussanswer true the major reasons are due to the fact that data received or
q what are the reasons for the world as a whole running a substantial current account deficitanswer this deficit improved sharply in the early 1980s
q consider how the united states balance of payments accounts are affected when us banks give two billion in debt owed to them by the government of
q in the year 2000 americans flocked to paris what economic forces made french goods seem so cheap to residents of the united statesanswer one
q who are the major participants in the foreign exchange marketanswer1 commercial banks2 corporations3 nonblank financial institutions4 central
q based on the case study a tale of two dollars illustrate why errors in the currency market will be more costly to the toronto blue jays baseball
q explain what a vehicle currency is why is the us dollar considered a vehicle currencyanswer a vehicle currency is one specifically widely used
q what are the factors affecting the demand for foreign currencyanswer three factors that affect the demand for foreign currency are risk expected
q what is the interest parity conditionanswer the circumstance that the expected returns on deposits of any two currencies are equal when measured
q what are the main functions of moneyanswer money serves generally three important functions that are a unit of account a medium of exchange
qwhat are the factors that determine the amount of money an individual desires to holdanswer three major factors that are first one the expected
q what are the main factors determining the aggregate money demandanswer three major factors the price level interest rate and real national
qexplain why one can write the demand for money as follows md p l r yanswer the collective money demand is proportional to the price level imagine
q what will be the effects of an increase in the money supply on the interest rate answer an enhance in the money supply will origins the interest
q at the conclusion of world war i germany as a punishment was obliged to take a large transfer to france in the form of reparations is it possible
q it is impossible for economic growth in a small country to lower that countrys economic welfare regardless of the bias of the growth explainanswer
2 if a countrys growth is biased in favor of its import this should unequivocally improve its terms of trade and its economic welfare discussanswer
q other things being equal a rise in a countrys terms of trade enhances its welfare what could happen if we relax the ceteris paribus assumption and
q in autarky country p was producing at point 5 with trade could its production point be found above or below point 5 explain why what must happen
q if trade were to open up between r and p where could the world terms of trade locate in the figure above somewhere on the pcpf axis could relative
q why are prices of factors of production not equalizedanswer again this statement may not or may be argued to be true on the other hand the