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What happens to the balance of payments of Country A? Why? How is it returned to equilibrium? What is the effect of this process on the rest of the world?
Under what circumstances would these changes parallel the needs of the domestic economy? When would these policy changes conflict with those needs?
Explain how payments adjustment would occur if Bulgaria started in equilibrium and then experienced a large increase in exports due to a boom in Germany.
Draw the supply and demand graphs for exports and imports for a small country that revalues. Do same for a larger country. Explain shifts that occur in lines.
Why do developing countries often find the macroeconomic policy requirements for success of a devaluation to be particularly painful and politically unpopular?
From the perspective of a monetarist, what is the only really important effect that a revaluation has on a surplus country?
What is the effect on Country A's macro economy of the adoption of an expansionary monetary policy by the rest of the world in a world of fixed exchange rates?
What are so-called heterodox adjustment programs? Are they a sound long-term approach?
If only the income effect is operating, what would the effect be on X's balance of trade of an increase in domestic investment of $200 million? Explain.
Use the IS/LM/BP graph to show why a domestic monetary contraction will not be effective if a fixed exchange rate is maintained.
If a flexible exchange rate exists, explain what would happen and how equilibrium would be restored.
What effect does the adoption of a flexible exchange rate have on the impacts of fiscal policy shifts in a country whose capital markets are closely integrated.
Why is the mercantilist argument for protection weakened by the adoption of a flexible exchange rate?
How does a restrictive monetary policy abroad affect the domestic economy under a float? How does this mechanism operate?
What are the principal arguments against a system of floating exchange rates? How do these stand up in the light of experience with floating rates since 1973?
Exchange rate fluctuations since 1973 appear to be larger than warranted by the underlying economic. What reasons have been offered to explain this experience?
How can central banks be caught in a new version of the Meade conflict cases under floating exchange rates?
In what ways is the Asian debt crisis similar to, and different from, the difficulties which Latin America experienced in the early 1980s?
Assume now that a quota of 76 units is put in place. Illustrate the resulting market equilibrium graphically.
Compute total demand and the amounts supplied by domestic and foreign suppliers. Compute the cost to the government of this scheme.
How is the opportunity to trade likely to change the structure of the fashion industry and the output of each designer in the industry?
Explain what the index of intra-industry trade shows, and suggest why the values of this index for Japan and Germany are so different.
What assumptions of the factor proportions model does the product cycle model relax or violate?
What role does proximity among producers play in determining whether external economies of scale are achieved?
What is the probable effect of such restrictions on the number of Mexican workers attempting to enter the United States? Explain why.