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Question
Explain the concepts of trade creation and trade diversion. Who are the winners and losers in each scenario?Answer
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Related questions
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How does the eclectic theory explain the concept of FDI? How can a host country offer incentives to attract FDI?
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________ dominates the foreign exchange market.
A) London
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The profit-motivated purchase and sale of interest-paying securities denominated in different currencies is called ________.
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B) spread of countertrade
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Fundamental analyses used for forecasting exchange rates estimate the timing, magnitude, and direction of future exchange rate changes.
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According to the efficient market view for forecasting exchange rates, forward exchange rates are perfect predictors of future exchange rates.
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Inflation is a result of the supply and demand for a currency.
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If an individual is traveling to another country and wants to exchange currencies at his bank before departing, he will be quoted the spot rate since he is exchanging on the spot.
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International transactions between two currencies other than the U.S. dollar often use the dollar as a vehicle currency.
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An offshore financial center is a territory whose financial sector features very few regulations and few, if any, taxes.
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How does the international capital market reduce the cost of money for borrowers? What are the two components for every quoted exchange rate?