the effects of domestic and international financial liberalization on the economy in terms of financial fragility and risk factors. discuss the mechanisms which generate the cycles of boom and bust after international financial liberalization
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the effects of domestic and international financial liberalization on the economy in terms of financial fragility and risk factors. discuss the mechanisms which generate the cycles of boom and bust after international financial liberalization.
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- Explain the statement: “ The Asian financial crisis was intimately related to foreign trade”What did the 2008 financial crisis cause in terms of the financial globalization?The Figure below shows the trade in financial services between Britain and the EU. SB denotes the supply of financial services by British financial companies, and DB shows the domestic demand for financial services by British consumers. Under free trade British financial houses can trade at the world market PW. As a result of “hard Brexit”, British financial houses are banned from doing business in the EU and are confined to the domestic market only (ignore trade with third countries) Identify British production, consumption, trade volume and total social welfare (consumption and production surpluses) under free trade. Identify British production, consumption, trade volume and total social welfare (consumption and production surpluses) after trade is banned.
- Hong Kong’s prosperity has become increasingly dependent upon its capacity to play that role effectively because Hong Kong is the important financial gateway to and from China, explainHas the globalisation of international trade and banking always been beneficial for the economies of countries ? Explain .Answer :Thoroughly explain the following issues: The influence that FDI’s have on Balance of payments (BOP) statistics and public attitudes.
- Define the term International Monetary Fund (IMF)?Country: Brazil Part 1 - What kinds of specific actions has the IMF taken in order to address economic or financial crises of your focus country? What is an example of any relationship or interaction that your focus country has had with the IMF? Part 2 – What are 3 examples of FDI news related to your focus country? (this could include information about investment promotion activity that your country sponsors/promotes) Part 3 – Please post images related to the following topics (include some verbiage explaining them) -FDI -foreign exchange market -regional economic integration3) Consider an open economy and use the IS/TR model together with uncovered interest parity condition (UIP) to answer the following questions: (a) Discuss and illustrate how globalization (NX) and interdependence of financial markets (UIP) can affect the propagation of international shocks. (b) Discuss and illustrate with the IS/TR and UIP graphs the effects on the domestic economy of an increase in the interest rate by a big foreign economy, affecting the level of the international interest rate. Assume that the domestic economy is adopting perfect capital mobility and a flexible exchange rate regime. (c) Why might a rise in international interest rates lead to hyperinflation in some highly-indebted countries? (d) A risk neutral investor in London has two investment opportunities. They can invest in one year UK government bonds with an annual nominal interest rate of 5%. Or they can invest in one year US government bonds with an annual nominal interest rate of 2.5%. Currently the spot…
- “There has been a turnaround from the sizeable net outflows over the past two years when South African companies stepped up their efforts to internationalise their businesses. The shift in direct investment trends made a small contribution to improving the financial account of South Africa’s balance of payments, which showed a surplus of 3.5% for the third quarter, up from 1.3% the previous quarter. The Reserve Bank’s quarterly bulletin shows that capital inflows were more than adequate to finance the deficit on the current account deficit of the balance of payments, which widened to 4.1% from a revised 2.9% in the third quarter. Economists expect that the current account deficit, which tends to be a driver of the rand exchange rate, will narrow again in the fourth quarter as exports pick up again” (Joffe, 2016). In your opinion, can the government keep export demand stimulated such that the balance of payments remains dazzlingDescribe the fuctions of the International Monetary Fundgraphically compare effects of monetary or fiscal expansion on equilibrium output in closed and open economy. EXPLAIN your results