Define Managed floating rate system
Managed floating rate system: This is a system in which foreign exchange rate is found out by market forces and central bank is a key contributor to stabilize the currency in condition of tremendous appreciation or depreciation.
Explain all the approaches of Paul Samuelson.
‘Can foreign exchange markets be analyzed in similar manner as the markets for ordinary physical commodities? Do demand slope downwards and supply slope upwards for currencies?’
Supply of foreign exchange: (A) By exports of services and goods(B) Direct foreign investment in residence country(C) For approximate purchases by non-residents in the home country(D) Remittances
safeguard against the crisis of confidence in system explain
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
Balance of payment Accounts: It is the systematic record of all economic transactions among the residents of a country and rest of the world in a specified period (1-year) of time.
Deficit in balance of trade point: Deficit in balance of trade points out that the imports of good are bigger than exports.
Which transactions- autonomous or accommodating carry balance in BOP? Answer: Accommodating transactions carry balance in the BOP or balance of payment.
The U.S. economy is an instance of a system characterized by: (1) Mixture of different aspects of various economic systems. (2) Strictly decentralized the decision making process. (3) Centralized ownership of resources. (4) Political decisions regarding all allocative
THE AREA BETWEEN THE LORENZ CURVE OF A COUNTRY AND THE DIAGONAL OF PERFECT EQUALITY REPRESENT
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