Questions:
1) Briefly explain the three accounts that make up the balance of payment (U.S.). Give the present value of each of these accounts (U.S.).
2) Explain the Marshall-Lerner Condition.
3) Explain mathematically, graphically (be sure to do all of these) and in words the International "Interest Parity" condition.
4) Discuss the pros and cons of different exchange rate regimes.
5) Show why it is only possible to have two of the following three: Free international Capital Mobility, Fixed Exchange Rates, Stabilizing Monetary Policy.
6) Explain in some detail how a central bank maintains a fixed exchange rate.
7) Discuss in some detail the factors discussed in class and in the text that determine exchange rates.
8) Discuss International Good Market equilibrium and PPP.
9) Discuss the rationale for Foreign Exchange ‘Sterilization.