the underlying causes of inflation in the economy. For example if the main cause is excess demand for goods and services‚ then government policy should look to reduce the level of aggregate demand. If cost-push inflation is the root cause‚ production costs need to be controlled for the problem to be reduced. Monetary Policy Since May 1997‚ the Bank of England has had operational independence in the setting of official interest rates in the United Kingdom. They set interest rates with the aim of
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coming days or weeks. According to the fundamental analysis‚ the euro exchange rates are expected to depreciate in the long-run. Although there was a short uptrend during last week‚ which was driven by yields‚ the investors worry more about deflation and the euro’s resilience. What’s more‚ the ECB rates are highly expected to be cut after ECB’s policy meeting on Thursday. The market is expecting a 25bps reduction in the benchmark rate to 0.50% from the current 0.75%. During the last week‚ many weak
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1. Examine the implications for an economy of a rising exchange rate FT 23 8 11 p16 Exchange rate kills Australian steel exports FT 7 9 11 p4 Bold move seen as high risk (Swiss max exchange rate)) FT 9 9 11 p32 Hong Kong faces dilemma over its peg to the dollar Financial Update 11/12 see Brazil‚ Australia‚ Switzerland and Japan Introduction Whilst popular opinion centres on the assumption that rising exchange rate has mostly positive effects on the economy‚ the impacts are
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The three year zero rate is 7% per annum and the four year zero rate is 7.5% pa (both continuously compounded). What is the one year (continuously compounded) forward rate starting in three years’ time? (2 marks) With the formula with continuously compounded‚ = =0.09 =9% The one year forward rate starting in three years’ time is 9% 1. The zero rate curve is flat at 6% pa with semi-annual compounding. What is the value of a FRA where the holder receives interest at the rate of 8% per annum with
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Central Banking (FIN10908) Hong Kong Linked Exchange Rate System Hong Kong Linked Exchange Rate System Introduction Hong Kong’s Linked Exchange Rate system is a currency board system‚ which requires both the stock and flow of the monetary base to be fully backed by foreign reserves. It is the exchange rate system implemented in Hong Kong to stabilize the exchange rate between the Hong Kong dollar (HKD) and the United States dollar (USD). This means that any change in the monetary base is fully
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1. History The Chinese government introduced its first exchange rate policy in 1949. From 1949 to 1955‚ the policy was based on a managed currency floating system. With the establishment of a centrally planned economy‚ the Chinese government implemented a pegged policy in 1955. After the collapse of Bretton Wood¡¯s system in the early 1970s‚ China changed its monetary policy to basket currency. The weak economic environment in the country in 1985 resulted in the re-introduction of the managed currency
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developed economies following the Industrial Revolution‚ is import substitution industrialisation (ISI). This is the notion of reducing foreign dependency of a country’s economy through focusing on domestic production of goods and services. An opposing strategy is export promotion. This includes measures taken by the government to increase the quantity and variety of goods and services that are exported. There is often debate among policy-makers about the effectiveness of each as a growth and development
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Issue 2 (28)‚ Volume 9‚ 2010‚ http://www.esp-world.info WRITING FOR ACADEMIC PURPOSES: PROBLEMS FACED BY ARAB POSTGRADUATE STUDENTS OF THE COLLEGE OF BUSINESS‚ UUM Fadi Maher Saleh Al-Khasawneh ABSTRACT This study aimed at investigating the academic writing problems of the Arab postgraduate students of the College of Business at Universiti Utara Malaysia and to provide solutions to these problems. For this purpose‚ four research questions were posed and the answers to these questions were
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Columbian Exchange also was bound to happen when the Europeans noticed that it was an excellent way to make more money. Over time the Western world of Europe‚ the Americas‚ and Africa interacted with the Columbian Exchange and the Middle Passage. With this interaction came the trading of foods‚ people‚ and social makeup. After Columbus in 1492‚ the "New World" became something of a blessing to the Europeans. With Native Americans to be used as a source of labor and
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Complete sentences are not necessary. Lesson 1 (3.0 points) 1. What are the three tools the Fed uses to keep the economy stable? (1.0 points) 1. fund rate 2. discount rate 3. reserve requirement ratio 2. What is a recession? (0.5 points) a period of temporary economic decline during which trade and industrial activity are reduced‚ generally identified by a fall in GDP in two successive quarters. 3. What is domestic commerce? (0.5 points) Domestic commerce refers to the
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