This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Does it appear that currency boards make fixed exchange rates credible? What will be an ideal ... (Read 87 times)

oliviahorn72

  • Hero Member
  • *****
  • Posts: 579
on: Jun 30, 2018
Does it appear that currency boards make fixed exchange rates credible?
 
  What will be an ideal response?

Question 2

Refer to the figure above, which shows domestic supply and demand. If P1 is equal to P2 (the world price) plus a tariff, then the social loss from the tariff is equal to
 
  A) a + c
  B) b
  C) P1 ( Q3 - Q2 )
  D) P2 (Q2 - Q1 ) + (Q4 - Q3 )
  E) a + b + c


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

alexisweber49

  • Sr. Member
  • ****
  • Posts: 311
Reply #1 on: Jun 30, 2018
Answer to Question 1

No, because is prohibited by law from acquiring any domestic assets, so all the currency it issues automatically is fully backed by foreign reserves. Also countries that adopt currency board, do it because one of the mayor advantage aside from the constrain it places on fiscal policy, central bank can never run out of foreign exchange reserves in the face of a speculative attack on the exchange rate. So the currency board cannot fix exchange rates.

Answer to Question 2

A


oliviahorn72

  • Hero Member
  • *****
  • Posts: 579
Reply #2 on: Jun 30, 2018
Correct answers!


alexisweber49

  • Sr. Member
  • ****
  • Posts: 311
Reply #3 on: Jun 30, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

Did you know?

Asthma cases in Americans are about 75% higher today than they were in 1980.

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Did you know?

Elderly adults are living longer, and causes of death are shifting. At the same time, autopsy rates are at or near their lowest in history.

Did you know?

Symptoms of kidney problems include a loss of appetite, back pain (which may be sudden and intense), chills, abdominal pain, fluid retention, nausea, the urge to urinate, vomiting, and fever.

There are multiple pathways for heat exchange between organisms and the environment. There are multiple pathways for heat exchange between organisms and the environment.
Poverty rates have declined in the last 50 years, and the biggest decline has been for people 65 and ... Poverty rates have declined in the last 50 years, and the biggest decline has been for people 65 and ...
Despite the globe’s vast social change, people all over the world continue to make race a ... Despite the globe’s vast social change, people all over the world continue to make race a ...
Maze-dull rats did not make significantly more errors than maze-bright rats when both groups were ... Maze-dull rats did not make significantly more errors than maze-bright rats when both groups were ...
Juan's Software Service Company is in a perfectly competitive market. Juan has total fixed ... Juan's Software Service Company is in a perfectly competitive market. Juan has total fixed ...
Main mechanism of carbon dioxide transport and exchange. A lesser amount of CO2 travels to the lungs Main mechanism of carbon dioxide transport and exchange. A lesser amount of CO2 travels to the lungs
Video: Passive Smoke Exposure

For a complete list of videos, visit our video library