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    (Original post by xChelsea)
    Thanks,
    Could you explain technological spill overs and outsourcing please.
    forgot technological spill overs! will need to look it up again

    but outsourcing, is shifting production from one area to another due to it being cheaper. Basically exploiting countries comparative advantage. So primark will outsource their production to countries which have low labour costs
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    how does a depreciation of a currency increase inflationary pressures?!
    hoping exchange rates doesn't come up..but it probably will do!
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    Oh yeah, i get it in terms of that. Thanks!
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    (Original post by viksta1000)
    Can I just point out aswell guys...keep your eye on the news...BBC/SKY/Bloomberg...as you might pick out a few arguments for tomorrow with the Greece huhaa going on at the moment


    Good Luck folks!
    Good advice! But how are you so good at economics? Have you been puting in solid work all year round or is your teacher really good?
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    (Original post by xChelsea)
    It's only fixed against other members of the eurozone but not against other currencies such as the dollar.
    Its not fixed against other member states. You don't go and exchange euro for euro. That's like me saying the scottish pound is fixed against sterling pound.
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    (Original post by jess-e-bee)
    how does a depreciation of a currency increase inflationary pressures?!
    hoping exchange rates doesn't come up..but it probably will do!
    it makes exports cheaper for foriegn consumers, and imports more expensive for domestic consumers. this leads to a surplus current account (trade balance) which is a factor of aggregate demand so creates demand pull. Also it makes imports more expensive so if its inelastic price of demand, consumption of import wont decrease but prices will rise

    Also bring in J curve for evaluation
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    (Original post by loki276)
    Its not fixed against other member states. You don't go and exchange euro for euro. That's like me saying the scottish pound is fixed against sterling pound.
    lol, it is fixed, its just that purchasing power parity is different between countries. One euro is always worth one euro! lol european central bank when collecting euro's, wont go 'oh this euro is worth 2 euros because its from germancy' 'but this euro is worth half a euro because its from spain'
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    so what is the 20 marker prediction
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    any one know what
    'period of fiscal austerity'
    measn...?
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    (Original post by loki276)
    Its not fixed against other member states. You don't go and exchange euro for euro. That's like me saying the scottish pound is fixed against sterling pound.
    You know what i mean!
    It's effectively fixed because they can't devalue/revalue it due to sharing it with other members..
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    (Original post by Elponchis_LOL)
    it makes exports cheaper for foriegn consumers, and imports more expensive for domestic consumers. this leads to a surplus current account (trade balance) which is a factor of aggregate demand so creates demand pull. Also it makes imports more expensive so if its inelastic price of demand, consumption of import wont decrease but prices will rise

    Also bring in J curve for evaluation
    Thanks!
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    (Original post by Iram0105)
    any one know what
    'period of fiscal austerity'
    measn...?
    Fiscal stimulus aimed at reducing the budget deficit i think

    e.g. Increasing tax, reducing government spending.
    Basically, similar to what our government is doing now.
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    Hello
    Can someone explain what is the link between FDIs and trade liberalisation please?
    And also, how lower Interest rates will affect FDIs, because until now I thought that the lower the IR the higher the FDIs as MNCs will see it as a rising consumption and therefore seize the opportunity? But, someone mentioned that higher interest rates would attract FDIs and I don't understand :/
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    (Original post by Elponchis_LOL)
    it makes exports cheaper for foriegn consumers, and imports more expensive for domestic consumers. this leads to a surplus current account (trade balance) which is a factor of aggregate demand so creates demand pull. Also it makes imports more expensive so if its inelastic price of demand, consumption of import wont decrease but prices will rise

    Also bring in J curve for evaluation

    Wouldn't it be just enough to say : It reduces prices of exports, therefore making exports more attractive, and imports are comparably more expensive. Consumption increases, and AD shifts out, leading to a price increase.

    Do you have to include tht J curve thing, how do you manage to bring all these points together !damn !
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    (Original post by Elponchis_LOL)
    lol, it is fixed, its just that purchasing power parity is different between countries. One euro is always worth one euro! lol european central bank when collecting euro's, wont go 'oh this euro is worth 2 euros because its from germancy' 'but this euro is worth half a euro because its from spain'
    Again not fixed. Its the same currency. You can't say that you fixed you currency to your currency. There is no fixed exchange rate as there is no exchange rate between member states
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    Whats a Two Speed Euro Area ?
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    (Original post by loki276)
    Again not fixed. Its the same currency. You can't say that you fixed you currency to your currency. There is no fixed exchange rate as there is no exchange rate between member states
    hmm your right, just being pedantic i spose
    it says currency are fixed between members of EU in tutor2u toolkit so i think you can use the word 'fixed'
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    (Original post by xChelsea)
    You know what i mean!
    It's effectively fixed because they can't devalue/revalue it due to sharing it with other members..
    I do but the two are seperate things. One is the eurozone wheras fixed would be something like the erm. The two share some similar qualities but are massively different
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    (Original post by bijesh12)
    Whats a Two Speed Euro Area ?
    the variation between average growth rates achieved by countries inside the monetary union
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    (Original post by nini27)
    Hello
    Can someone explain what is the link between FDIs and trade liberalisation please?
    And also, how lower Interest rates will affect FDIs, because until now I thought that the lower the IR the higher the FDIs as MNCs will see it as a rising consumption and therefore seize the opportunity? But, someone mentioned that higher interest rates would attract FDIs and I don't understand :/
    I also would think that higher the interest rates, there would be hot money flows in the form of FDI's,due to the higher returns.

    I think if a country recives FDI,from a developing country it may open up to trade from the receiving country.
 
 
 
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