Author Question: Assume policy makers in a fixed exchange rate regime decide to peg the exchange rate at a lower ... (Read 217 times)

jasdeep_brar · **on:** Jun 30, 2018

Assume policy makers in a fixed exchange rate regime decide to peg the exchange rate at a lower level. This is called

A) a devaluation.
B) a revaluation.
C) a depreciation.
D) an appreciation.

Question 2

Explain Mathusian trap.

What will be an ideal response?

zoeyesther · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

B

Answer to Question 2

Thomas Robert Malthus, an English economist, argued that an increase in output would lead to a decrease in mortality, leading to an increase in population until output per person was back to its initial level. The stagnation of output per person is called a Malthusian trap.