Fixed exchange rate, Managerial Economics

Country A has a fixed exchange rate with country B. Due to a recession in country B, demand for A's goods falls. Draw what would happen on the graph below. On the graphs, draw what country A's central bank must do to keep the fixed exchange rate. Answer the following:

What will happen to A's output?

What will happen to the price level in country A?

1877_exchange rate1.png

Posted Date: 3/13/2013 6:39:41 AM | Location : United States







Related Discussions:- Fixed exchange rate, Assignment Help, Ask Question on Fixed exchange rate, Get Answer, Expert's Help, Fixed exchange rate Discussions

Write discussion on Fixed exchange rate
Your posts are moderated
Related Questions
Why do the managers in marris model maximise their satisfaction by choosing a higher growth rate and a lower valuation ratio when compared to the profit maximisation

A hypothetical AD-AS model for Canada During the 1990s, many stock market investors in Canada became optimistic about information technology and bid up stock prices, more t

Question 1: Either ‘Today the business organizations are quite different from the traditional classical firm with a wide range of objectives.' Discuss the above statement

What is the goal of a firm?

Uses of Indifference Curve Analysis Indifference curve analysis is useful when studying welfare economics as follows: They are used to indicate the amount of income and

Monetary policies This is the direction of the economy through the variables of money supply and the price of money.  Expanding the supply of money and lowering the rate of in

Disadvantages The effect on incentives High  progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk

a. Explain why the demand for a particular brand is more elastic than the demand for all cigarettes. If Lucky Strike raised its price by 1% in 1918, was the price elast

Goverment Banker, Fiscal Agent and Adviser Central banks in all countries acts as the fiscal agent, banker and adviser on all important financial matters to government of thei

What is optimal output rule? Optimal output rule: According to the optimal output rule, describe that profit is maximized through producing the quantity of output at that th