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Author Question: Explain the cases for and against flexible and fixed exchange rate regimes. What will be an ideal ... (Read 77 times)

serike

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on: Jun 30, 2018
Explain the cases for and against flexible and fixed exchange rate regimes.
 
  What will be an ideal response?

Question 2

Which of the following will cause an increase in the steady-state growth rate of capital?
 
  A) an increase in the saving rate
  B) an increase in the population growth rate
  C) a temporary increase in technological progress
  D) all of the above
  E) none of the above


manuelcastillo

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Case for fixed: cannot trust the central bank to pursue responsible monetary policy, reduces relative price variability by fixing E. Case for flexible: enables monetary policy to serve as a stabilization tool.

Answer to Question 2

B


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