Question
How does a monetary easing affect aggregate demand through the exchange-rate channel?
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Answer
Currency depreciation supports net exports, raising aggregate demand.
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Question
How does a policy rate cut work through the credit channel?
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Answer
Cheaper, more available credit increases borrowing and spending.
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Question
Why is the real exchange rate more informative than the nominal rate for competitiveness?
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Answer
It adjusts for relative price levels and purchasing power.
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Question
How does the WTO support international trade?
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Answer
It sets trade rules, negotiates agreements, and settles disputes.
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