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What is the basic trade identity equation?
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What are the three major components of the Current Account? Which is the biggest?
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Define an exchange rate.
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Explain the three major reasons why exchange rates change.
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Describe the gold standard. When and why did it collapse?
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Explain the gold specie flow mechanism.
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What was the major difference between the gold standard and the Bretton Woods system? When and why did Bretton Woods collapse?
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Describe the current international monetary system.
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What is an exchange-rate intervention?
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What are the three major causes of the chronic trade deficits of the United States?
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Illustrate the multiplier link.
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Suppose that America wants to reduce its trade deficit with Japan. What might the United States encourage Japan to do?
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Illustrate the monetary link.
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Explain some of the difficulties of coordinating macroeconomic policies between countries.
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Illustrate the benefits of global coordination.
