Author Question: Assume a country is in a fixed exchange rate regime. Now suppose that individuals expect that policy ... (Read 161 times)

rayancarla1

  • Hero Member
  • *****
  • Posts: 571
Assume a country is in a fixed exchange rate regime. Now suppose that individuals expect that policy makers will devalue its currency. Explain the various actions that policy makers can choose in response to this expected devaluation.
 
  What will be an ideal response?

Question 2

Suppose output per worker in a country has grown at the same rate as technology over for many years. This country's growth would be described as
 
  A) appropriable growth.
  B) balanced growth.
  C) effective growth.
  D) diffuse growth.
  E) none of the above



billybob123

  • Sr. Member
  • ****
  • Posts: 336
Answer to Question 1

Policy makers can attempt to persuade (via official announcements) that they remain committed to pegging the currency at its current rate. Second, they may have to raise domestic interest rates to prevent any depreciation of the currency. Eventually, they may be forced to devalue because of the contractionary effects of the higher i.

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Drying your hands with a paper towel will reduce the bacterial count on your hands by 45–60%.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

Sperm cells are so tiny that 400 to 500 million (400,000,000–500,000,000) of them fit onto 1 tsp.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

For a complete list of videos, visit our video library