What benefits did an overvalued currency offer a domestic economy ...

[folubunmi]

What benefits did an overvalued currency offer a domestic economy in the ISI period? Which sectors were typically harmed by overvalued currencies?
 
  What will be an ideal response?

Question 2

National savings is important for all of the following reasons EXCEPT
 
  A) it can be used to consume additional foreign goods.
  B) it can be used to fund private investment.
  C) it can be used to fund government investment.
  D) it can be used to fund foreign investment.

[ndhahbi]

Answer to Question 1

Overvalued exchange rates made it easier for targeted industries to buy imported capital goods and kept urban workers more allied with political leaders because foreign goods were relatively less expensive. It made it difficult to export, especially for the traditional commodity producers, which hurt investment and income in rural areas. Non-targeted industries lost sales and production. Industrial investment was too capital intensive and unable to create jobs fast enough to absorb labor leaving rural areas.

Answer to Question 2

A

[folubunmi]

Thank you

[ndhahbi]

No problemo