Macroeconomic adjustment and EMU
The practice considers the Treasury’s elucidation of the consequence on macroeconomic adjustment of joining the euro.
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Understanding the actual exchange rate as a macroeconomic adjustment method and how this would be influenced by joining the Euro; interactions among markets in the macro economy and the utilizations of expectations in economic modeling are discovered.
Determine the factors accountable for inflow of foreign currency? Answer: a) Foreigners buying home country services and goods via exports. b) Foreigners investment in home country via joint ventures and via
distinguish between autonomous transactions and accommodating transactions under balance of payments
Fixed exchange rate system (or pegged exchange rate system): This is a system in which exchange rate of a currency is fixed by government. This system makes sure stability in the foreign trade and capital movement.
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 : Determining total receipts-Balance of When Balance of payment of a country is Rs (-) 100 crores and total payment are Rs 500 crores. Determine its total receipts.
When Balance of payment of a country is Rs (-) 100 crores and total payment are Rs 500 crores. Determine its total receipts.
‘The pound has enhanced today on the foreign exchange market’ is a general media comment whenever the pound sterling appreciates. When the pound appreciates is it always excellent news for business and the economy?’
5. What are the factors responsible for the recent surge in international portfolio investment?
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
Calculate the value of imports, if the net imports are of Rs 160 crores and the value of exports are of Rs 400 crores.
Peanut butter, jelly sandwiches and tuna fish sandwiches are replacements. Assume an international agreement decreased the worldwide catch of tuna by half. The equilibrium price of grape jelly would be: (1) Increases while the equilibrium quantity is reduced. (2) Drop
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