International Economics
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Dominick-Salvatore-International-Economics
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What is the relative purchasing-power parity the- ory? Do empirical tests confirm or reject the relative purchasing-power parity theory? 4. What is demand for money according to the mone- tary approach to the balance of payments? What is the supply of money of the nation? What is meant by the monetary base of the nation? the money mul- tiplier? 5. How does a deficit or a surplus in the nation’s bal- ance of payments arise according to the monetary approach? Why do nations lose control over their money supply in the long run under fixed exchange rates? Salvatore c15.tex V2 - 10/18/2012 12:45 A.M. Page 495 Problems 495 6. How does the monetary approach explain the pro- cess by which a balance-of-payments disequilib- rium is corrected under a flexible exchange rate system? How does this differ from the case of fixed exchange rates? 7. What determines the value of the exchange rate and its change under a flexible exchange rate sys- tem according to the monetary approach? How does a managed floating exchange rate system compare with a flexible and fixed exchange rate system from the point of view of the monetary approach? 8. What is the role of expectations and uncovered interest arbitrage in the monetary approach to the balance of payments? 9. What is meant by the asset market or portfolio bal- ance approach? In what ways does it differ from the monetary approach? 10. What is the relative importance of stock adjust- ments in financial assets as compared with ad- justments in trade flows for exchange rate changes in the short run and in the long run according to the portfolio approach? 11. What is the role of expectations and the risk pre- mium in the asset market or portfolio balance approach? Why was there no risk premium in the monetary approach? 12. How do the monetary and the asset market or port- folio balance approaches explain the over–shooting in exchange rates that is often observed in foreign exchange markets today? Download 7.1 Mb. Do'stlaringiz bilan baham: |
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