After bad experiences with a flexible exchange rate

Assignment Help Business Economics
Reference no: EM13837319

a) After bad experiences with a flexible exchange rate, the small open economy of Rivendell decides to fix it exchange rate. Suppose the economy of Rivendell has reached the long run equilibrium (i.e. full employment).Use the Mundell-Fleming model to explain what would happen to aggregate income, the real exchange rate, the nominal exchange rate, the real interest rate in this small open economy with a fixed exchange rate if the government implements a tariff on imported goods.

b) Is trade policy more effective under a flexible exchange rate than under a fixed exchange rate? Explaining your reasoning.

Reference no: EM13837319

Questions Cloud

In small open economy with fixed exchange rate : In a small open economy with a FIXED EXCHANGE RATE, the central bank buys foreign currency in the foreign exchange market to prevent a depreciation of the nominal exchange rate.
Direct labor hours : Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 2015: Level of Activity Driver: Direct Labor Hours
Small open economy-starting from position of balanced trade : In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade deficit and negative net capital outflow.
The basic facts about trojan café. : Trojan Café is a small on-campus coffee shop that operates from 7am until 10am during the morning rush, with no customers arriving after 10am. The store is thinking of streamlining its operation, and it is interested in understanding how this will im..
After bad experiences with a flexible exchange rate : After bad experiences with a flexible exchange rate, the small open economy of Rivendell decides to fix it exchange rate. Suppose the economy of Rivendell has reached the long run equilibrium. Is trade policy more effective under a flexible exchange ..
Writing intensive labor market economics class : Why is your topic important? What is(are) the policy(s) that you are going to discuss in your paper? Identify the relevant literature. This is for a writing intensive labor market economics class. I need about a page and a half meeting the above crit..
Worked extensively in japanese manufacturing : "Class: As you already know, Total Quality Management was developed by a management consultant named William Deming, who worked extensively in Japanese manufacturing.
What is the exposure of the surety : A contract for a project has a value of $5,000,000. A performance bond of 25% has been issued for the project. The contractor performs only 50% of the work. The consulting engineer has certified to the owner that 80% has been completed. The surety th..
The shopping channel-management of large global network : The Shopping Channel (TSC) has contracted out the management of its large global network of thousands of computers to Morhel Communications (MC), a network management specialist.

Reviews

Write a Review

 

Business Economics Questions & Answers

  Various combinations of scores

Budget line showing the various combinations of scores on the two exams that she can achieve with a total of 400 minutes of studying.

  Transfer pricing to accomplish profitability objectives

Export and import practices are at the heart of a country’s trade balance with the rest of the world? Why do some countries subsidize their exports when WTO regulations do not allow that? Are global companies such as Intel, Cisco, Microsoft, oracle, ..

  The terms of trade between two countries refer

The terms of trade between two countries refer to

  What type of price discriminiation is this

What if the monopolist charged P= $5.50 for the first 3 units of the commodity and P= $4 for the next 3 units What type of price discriminiation is this?

  Find out the real rate of interest earned by albert in each

Find out the real rate of interest earned by Albert in each of the three years and his total real return over the three-year period. Suppose that interest earnings are reinvested each year and themselves earn interest.

  Discuss the impact of rational self-interest

What determines whether or not a resource is scarce? Why is the concept of scarcity important to the definition of economics? Discuss the impact of rational self-interest on each of the following decisions. Suppose you go to a restaurant and buy an e..

  The banking system has a required reserve ratio

If the banking system has a required reserve ratio of 10%, then the money multiplier is: If Bank A receives a $10,000 deposit and the reserve requirement is 10%, how much does Bank A have available to loan out?

  How much should douglas boats expand

Douglas Boats is a supplier of boating equipment for the states of Oregon and Washington. It sells 5,000 White Marine WM-4 diesel engines every year. These engines are shipped to Douglas in a shipping container of 100 cubic feet, and Douglas Boats ke..

  Calculate the pw of the after tax cash flow

Injection molding machines are needed to be replaced at a company. The list is narrowed down to two options based on various parameters like screw diameter, injection pressure, injection capacity, rate, and screw rpm and so on. calculate the PW of th..

  Q1 apparent motion is dependent on factors other than isi

q1. apparent motion is dependent on factors other than isi. describe the various factors that would affect ones ability

  Mexicans producers at equilibrium with international trade

Based on Figure 1 if the Mexcian government imposes a per-unit tariff of $2.5 on calculators, the total quantity of calculators produced by Mexicans producers at equilibrium with international trade is

  Discuss the opportunity costs of natural disasters

Discuss the opportunity costs of natural disasters. Calculate (in $$$) your opportunity costs of natural disaster.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd