User Account

All Pages

Internal and external balance

Assignment Help Business Economics
Reference no: EM131523861

Internal and external balance

Question 1

(i) An economy is in internal balance but have a Current Account deficit. Its IB schedule is steeper than the EB schedule. Explain in what situation you would be able to restore external balance without disrupting internal balance.

(ii) An economy is in external balance but have an unemployment situation. Its IB schedule is steeper than the EB schedule. Explain in what situation you would be able to restore internal balance without disrupting external balance.

(iii) Explain why the external balance is upward sloping.

Question 2

(i) An economy is in internal balance but have a Current Account deficit. Its IB schedule is steeper than the EB schedule. Explain in what situation you would be able to restore external balance without disrupting internal balance.

(ii) An economy is in external balance but have an unemployment situation. Its IB schedule is steeper than the EB schedule. Explain in what situation you would be able to restore internal balance without disrupting external balance.

(iii) According to the Swan model, the order in which policy goals are pursued will determine whether policy assignment is stabilising or destabilising. Do you agree?

Question 3

(a) Assume that Singapore is currently achieving internal balance, but experiencing a trade surplus. Also assume that Singapore faces a relatively elastic IB schedule and a relative inelastic EB schedule. Explain how and why an attempt to restore external balance will disrupt internal balanceand how internal balance would be restored.

(b) Assume that Malaysia is currently achieving internal balance, but experiencing a trade deficit. Also assume that Malaysia faces a relatively inelastic IB schedule and a relatively elastic EB schedule. Explain how and why an attempt to restore external balance will disrupt internal balance and how internal balance would be restored.

IS-LM-BP

Question 1

Using the ISLMBP model, explain the following situation:

(a) Explain the effects that a decrease in taxes has for the domestic economy with zero capital mobility under a fixed and a flexible exchange rate system.

(b) Explain the effects that an increase in money supply has for the domestic economy with perfect capital mobility under a fixed and a flexible exchange rate system.

Question 2

Using the ISLMBP model, explain the following situation:

(i) Assume zero capital mobility; explain the effects that an increase in government expenditure has for the domestic economy under a fixed and a flexible exchange rate system.

(ii) Assume perfect capital mobility; explain the effects that an increase in money supply has for the domestic economy under a fixed and a flexible exchange rate system.

Question 3

(i) Assume that Singapore is currently achieving internal balance, but experiencing a trade surplus. Also assume that Singapore faces a relatively elastic IB schedule and a relative inelastic EB schedule. Explain how and why an attempt to restore external balance will disrupt internal balanceand how internal balance would be restored.

Assume that Malaysia is currently achieving internal balance, but experiencing a trade deficit. Also assume that Malaysia faces a relatively inelastic IB schedule and a relatively elastic EB schedule. Explain how and why an attempt to restore external balance will disrupt internal balance and how internal balance would be restored.

Reference no: EM131523861

Questions Cloud

What pricing technique will you use : discussion of how you will take advantage of the strengths and opportunities and what action you will take to counter the weaknesses and threats
Discuss the creativity-enhancement ideas : Think of a strategic mistake that you made or that was made by an organization. What do you think caused it? How might the six-step process.
Explain two of french and raven bases of power in case study : Identify two of French and Raven's bases of power in the case study, and explain how leaders can use these bases of power to exert influence.
Develop a detailed tactical marketing mix strategy : Develop a detailed tactical marketing mix strategy(product, price, promotion, place, and service).Create an exit strategy and guidelines for its implementation.
Internal and external balance : An economy is in internal balance but have a Current Account deficit. Its IB schedule is steeper than the EB schedule.
What characteristics would such an organization have : Choose a decision that you currently face. What are your objectives in this situation? List your means objectives, and for each means objective list.
Discuss an important element of creativity : The point is often made that formal schooling can actually discourage young children from following their natural curiosity.
Evaluate external influences that affect consumer behavior : Analyze the concepts of consumer behavior, changes, and their effect on marketing.Evaluate external influences that affect consumer behavior.
Discuss best method for resolving the issue : Using the five step decision making process outlined below, create a plan of action to improve in those areas

Reviews

Write a Review

Business Economics Questions & Answers

  Concept of capabilities to function

How does the concept of capabilities to function' help us gain insight into development goals and achievement? Explain its contribution in measuring level of development.

  Prepare a power point presentation on networks

Prepare a power point presentation on networks and networking suitable for work areas for the company you are currently employed in.

  Identify the bottleneck resource

Senior management at the LCB Watercraft (LCBW) company would like you to help pick the mix of products they should produce and sell – this involves determining the production quantities for each model. LCBW always has a contingent of 10 workers on ha..

  Next nominal GDP rises and the GDP deflator falls

From one year to the next nominal GDP rises and the GDP deflator falls. Which of the following exclusions from GDP suggests that GDP is underestimating our material well-being? Full employment is typically associated with:

  Exchange rate between the us dollar and the euro

Assume that the six-month forward exchange rate between the US dollar and the euro today is $1.22 per euro. Assume also that the spot rate is $1.10 per euro. Then we can say that the euro is trading at a

  Economic advantage over those in the us

Opponents of NAFTA point out that pollution is largely a free good in Mexico also that being free to pollute gives industries in Mexico an economic advantage over those in the U.S. also Canada.

  Offered to risk-averse individual to willingly accept gamble

What term best describes the payment which must be offered to a risk-averse individual to willingly accept a gamble?

  Explain feelings of debian package management

In about 200 words, explain your feelings of Debian Package Management vs. RedHat Package Management.

  Will her demand for IHOP pancake become more or less elastic

Suzette Crepe orders pancakes at her local IHOP every morning. When pancakes cost $1.20 per stack, she buys 6 stacks. When the price/stack is $1.80, she buys 5. Microwaveable pancakes become available at Suzette’s grocery store. Will her demand for I..

  Disposable personal income equals personal income

Disposable personal income equals personal income and two factors are the keys to determining labour productivity

  Find the probability that a random sample of has a mean

Given a normal population whose mean is 50 and whose standard deviation is 10. Find the probability that a random sample of 4 has a mean between 49 and 52.

  What would the costs of each action be

what would the benefits of each action be (besides emissions reduction)? what would the costs of each action be?  How would you decide what was the best level of emission reduction?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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