Get premium membership and access questions with answers, video lessons as well as revision papers.
The direct functional relation between exchange rate and purchasing power is unrealistic.
There is a problem in construction of price index numbers.
It neglects capital account.
The theory assumes that there are no structural changes.
According to this theory there is no change in barter trade terms.
It neglects demand and supply forces.
It neglects aggregate income and expenditure.
It doesn’t take into considerations change in international economic relations.
Judiesiz answered the question on August 7, 2018 at 13:50
- Outline the criticisms of mint parity theory(Solved)
Outline the criticisms of mint parity theory.
Date posted: August 7, 2018. Answers (1)
- Outline the assumptions of classical theories of international trade(Solved)
Outline the assumptions of classical theories of international trade
Date posted: August 7, 2018. Answers (1)
- Explain the main methods of profit maximisation in the market(Solved)
Explain the main methods of profit maximisation in the market
Date posted: August 6, 2018. Answers (1)
- Describe six policies that can be adopted by developing countries to improve agricultural sector(Solved)
Describe six policies that can be adopted by developing countries to improve agricultural sector.
Date posted: August 2, 2018. Answers (1)
- Explain the meaning of the following terms as used in economics: i. Fiscal and monetary policy. (4 Marks) ii. Exchange rate and interest rate. (4 Marks) iii. Unemployment...(Solved)
Explain the meaning of the following terms as used economics:
i. Fiscal and monetary policy. (4 Marks)
ii. Exchange rate and interest rate. (4 Marks)
iii. Unemployment rate and Okun’s law. (4 Marks)
Date posted: August 2, 2018. Answers (1)
- Given the following equation, derive the expression for the IS curve(Solved)
Given the following equation, derive the expression for the IS curve.
C =100 +0.8Yd (Consumption function)
I = 10 –10r (Investment function)
G = 10 (Government purchases)
T = 0.25 (Tax rate)
Date posted: August 1, 2018. Answers (1)
- Explain why fiscal and monetary policies are referred to demand management policies(Solved)
Explain why fiscal and monetary policies are referred to demand management policies
Date posted: August 1, 2018. Answers (1)
- Explain the three basic assumptions underlying the national income accounting(Solved)
Explain the three basic assumptions underlying the national income accounting.
Date posted: August 1, 2018. Answers (1)
- Explain the limitations of Harrod-Domar Models(Solved)
Explain the limitations of Harrod-Domar Models.
Date posted: August 1, 2018. Answers (1)
- Given the following equations for a certain economy C = 100 + 0.75 Y...(Solved)
Given the following equations for a certain economy:
C = 100 + 0.75 Y
I = 560
X= 350
M = 40 + 0.15Y
Suppose the figures are in US Dollars billion, determine the equilibrium level of income. (5 Marks)
Date posted: August 1, 2018. Answers (1)
- State and explain the three components of Balance of Payments (BOP)(Solved)
State and explain the three components of Balance of Payments (BOP).
Date posted: August 1, 2018. Answers (1)
- What do you understand by the terms floating exchange rate regime and pegged exchange rate regime?(Solved)
What do you understand by the terms floating exchange rate regime and pegged exchange rate regime?
Date posted: August 1, 2018. Answers (1)
- Explain four reasons why residents of any country demand foreign currency in the foreign exchange market(Solved)
Explain four reasons why residents of any country demand foreign currency in the foreign exchange market
Date posted: August 1, 2018. Answers (1)
- State the theory of covered interest parity(Solved)
State the theory of covered interest parity.
Date posted: August 1, 2018. Answers (1)
- Explain the difference between covered interest arbitrage and uncovered interest arbitrage(Solved)
Explain the difference between covered interest arbitrage and uncovered interest arbitrage.
Date posted: August 1, 2018. Answers (1)
- Describe a full-reserve banking system(Solved)
Describe a full-reserve banking system.
Date posted: July 27, 2018. Answers (1)
- Give a critical view on Fractional-reserve banking(Solved)
Give a critical view on Fractional-reserve banking.
Date posted: July 27, 2018. Answers (1)
- Over the past decade, there has been a trend towards increasing the independence of central banks as a way of improving long-term economic performance. In...(Solved)
Over the past decade, there has been a trend towards increasing the independence of central banks as a way of improving long-term economic performance. In respect to this statement discuss any 4 types of independence of a typical central bank.
Date posted: July 27, 2018. Answers (1)
- The Central Bank has several instruments to use to counter changes in the market and influence price stability. Discuss any 5 of the instruments. (Solved)
The Central Bank has several instruments to use to counter changes in the market and influence price stability. Discuss any 5 of the instruments.
Date posted: July 27, 2018. Answers (1)
- Discuss any five (5) determinants of the changes in interest rates(Solved)
Discuss any five (5) determinants of the changes in interest rates.
Date posted: July 27, 2018. Answers (1)