Government policy of managing country foreign exchange rate

Assignment Help Business Economics
Reference no: EM131399082

Short Answer: Answer the following questions in 2 or 3 brief written paragraphs.

1. Briefly explain the "pros" and "cons" of a government policy of "managing"the country's foreign exchange rate as compared to a policy of letting the exchange rate "free float" according to prevailing market forces.

2. Using the simple model of supply and demand for foreign exchange (eg.$US) that we studied from Chapter 14 of the course textbook, illustrate theeffects on the foreign exchange market of an increase in the relative productivityof the foreign country. Briefly describe the implications of such a change forthe domestic country's balance of payments, and domestic monetary policy,assuming a fixed exchange-rate regime.

3. "The current account measures the gap between a country's current productionand its current use of resources". Explain this statement and how itrelates to the effects of government budget deficits on a country's current account.

4. Using an example explain what is meant by "exchange rate risk". Briefly discuss two ways that you can "hedge" against such risk.

Reference no: EM131399082

Questions Cloud

Questions to diagnose and solve the problem : Before continuing, first answer the following 3 questions to diagnose and solve the problem.  Then, please elaborate in your answer to the question above.
What are the limitations of the constant growth model : Using the constant dividend growth model, determine whether ABC and WHY are over- or undervalued. What are the limitations of the constant growth model?
Characteristics that individuals care about : What jobs do you think have the best mix of salary and other characteristics that individuals care about?
Discuss important legislative constraints in health care : Describe the evolution of the health care industry and its implications for providers, consumers, and third-party payers.Explain the salient characteristics of various types of provider organizations, including mission, program goals and objectives..
Government policy of managing country foreign exchange rate : Briefly explain the "pros" and "cons" of a government policy of "managing"the country's foreign exchange rate as compared to a policy of letting the exchange rate "free float" according to prevailing market forces.
Identify health related issues relevant to the population : Identify health related issues relevant to the population you chose. Use multiple resources, such that you include at least three journal articles from the South University Online Library.
Effect a reduction in the us interest rate : Explain what effect a reduction in the U.S. interest rate would have on the exchange rate?
Minimum point on the average total cost curve : Explain why Marginal Cost must pass through the minimum point on the Average Total Cost curve.
How your current qualifications match up to skills needed : Explain how your current qualifications match up to the skills needed. Explain the websites you have visited and what you learned from each.

Reviews

Write a Review

Business Economics Questions & Answers

  Which sweden -portugal both produce oil also stained glass

Assume which Sweden also Portugal both produce oil also stained glass. Sweden's opportunity cost of producing a pane of stained glass is 8 barrels of oil.

  To be a senator an individual

To be a senator, an individual must ________.

  Child abuse prevention and treatment act

The goals of the _________ are to increase economic self-support and self-sufficiency, reduce abuse and neglect of children and adults, reduce inappropriate institutional care, and secure institutional care when needed. a. Social Services Block Grant..

  Original manufacturer and new generic manufacturers

When patent protection expires for a pharmaceutical company, it forces changes within the company to adjust its business strategies from a monopolist position to a position that is much more competitive. What happens to the average total cost curve f..

  A linear cost per week

A linear cost per week

  All three cost equations and functions

Calculate the following for all three cost equations/functions: Compare the shapes of these curves and discuss their characteristics.

  Produce the optimal level of output

The cost measure sellers use to determine whether or not to produce the optimal (i.e. profit maximizing) level of output is:

  Identify the resulting consumer and producer surplus using

Identify the resulting consumer and producer surplus using the "Final" (surplus) shader tool.

  What is the domain of profitable demand during a month

A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $800,000 per month. The variable cost per thousand board feet is $155.50 the price charged will be ..

  At some levels of output acmes average total costs

At some levels of output Acme's average total costs are less than Generic's, but at some levels of output Generic's average costs are less than Acme's.

  Determine the distribution of after-tax cash flows

A forecasted increase in metal prices has encouraged the Delta Resource Company to consider the expansion of the capacity in one of its open pit mine operations in Northern Ontario. Existing Capacity: Positive after tax annual cash flows of $12.5 mil..

  Decision-making of farmers in poor rainfed agricultural

Consider the decision-making of farmers in a poor rainfed agricultural area of India. Suppose that there are two possible outcomes at the end of each growing season depending on the amount of rainfall: the good outcome generates revenue of $100, the ..

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