Define fixed exchange rate
Fixed exchange rate: It is the rate of exchange which is fixed by the Government in an economy.
Let us suppose that US gasoline market has the demand and supply curvesQd = 10 – 0.5PdQs = -2 + Ps when Ps ≥ 2 and Qs = 0 if Ps < 2, Q : Who won the Nobel Prize for Economics Who won the Nobel Prize for Economics in 1997?
Who won the Nobel Prize for Economics in 1997?
In a completely employed economy, the higher the yield of capital goods, and the bigger its: (1) Present living standards. (2) Present output of consumer goods. (3) Growth of capacity for the future production. (4) Rates of inflation and unemployment.
If exchange rate of foreign currency downs or falls, its demand rises. Describe how? Answer: If exchange rate falls, an import become cheaper, demand for imports in
what are the techniques of balance of payment?
Balance of payments (BOP) always balances. Describe it. Answer: Balance of payments is for all time balanced. The negative balance on current account is equated wit
Components of current account of BOP account: (A) Import-Export of goods(B) Import-Export of services(C) Unilateral transfers
If the Chinese economy could create all goods with fewer resources per unit than are needed in US, the citizens of China would: (i) Encompass a comparative advantage in the whole thing. (ii) Be self-sufficient since there would be no potential profits from trade. (iii
Define foreign exchange: It is the currency other than domestic currency.
Flexible (or floating) exchange rate system: This is a system in which exchange rate is found out by forces of demand and supply of the foreign currencies concerned in the foreign exchange market. There is no official interference in the foreign excha
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