Natural level of output

Assignment Help Macroeconomics
Reference no: EM131334679

a. Assume a country is in a fixed exchange rate regime such as China. Explain what factors might cause individuals to expect that a country will revalue its currency. Explain the various actions that policy makers can choose in response to this expected revaluation.

b. Assume a country is in a fixed exchange rate regime. Now suppose that individuals expect that policy makers will devalue its currency. Explain the various actions that policy makers can choose in response to this expected devaluation.

c. Suppose the economy is operating below the natural level of output. Discuss the arguments for and against using devaluation in such a situation.

d. Suppose the economy is initially operating above the natural level of output. In a fixed exchange rate regime, explain how the economy will adjust to this situation.

Reference no: EM131334679

Questions Cloud

Price-quantity combination for the first group : Part 1: Draw the price-quantity combination for the first group of movie-goers and label it Market Price 1. Part 2: Draw the price-quantity combination for the second group of movie-goers and label it Market Price 2. Part 3: Draw the price-quantity c..
Carefully draw the extensive form : a) Carefully draw the extensive form of the (Bayesian) Game. Make sure to label all actions andpayoffs. b) Assuming x = 0.2, solve for all pure-strategy Bayesian Nash Equilibria of this game. c) For what values of x will the pure-strategy Bayesian eq..
What is the base salary of the international assignee : What is the base salary of the international assignee?- How much is the G&S differential and how was it calculated?
Standardization and localization of the pm system of the mne : What are the tensions between standardization and localization of the PM system of the MNE?- How does the international character of the MNE impact the design of the PM system?
Natural level of output : Suppose the economy is operating below the natural level of output. Discuss the arguments for and against using devaluation in such a situation.
Problem regarding the domestic economy : Assume the exchange rate is allowed to fluctuate freely. Using the IS-LM-IP model, graphically illustrate and explain what effect expansionary monetary policy will have on the domestic economy. In your graphs, clearly label all curves and equilibr..
Write the two sonnet : I need two sonnet as given sonnet - Let me not to the marriage of true minds
What is the presence of bias in the lmx relationship : What is the presence of bias in the LMX relationship? What is its potential impact on out-group and in-group members of the organization?
What precautions must one take : What precautions must one take when using ratio analysis to make financial decisions?- Which ratios would be most useful for a financial manager's internal financial analysis?

Reviews

Write a Review

Macroeconomics Questions & Answers

  What is the efficient amount of air quality

Consider an air basin with only two consumer, Huck and Matilda. Suppose Huck's demand for air quality is given by q_h=1-p where p is Huck's marginal willingness to pay for air quality. Similarly, Matilda's demand is given by q_m=2-2p. Air quality ..

  Government needs to eliminate the gap changing expenditure

Government needs to eliminate the gap by changing expenditures. What policy would you suggest.

  Explain the causes of recent recession and when

Explain the causes of recent recession and when it started and when it technically ended. Finally why the recent recession was called the worst recession after the great depression.

  Demand and supply curves for cigarette market

Statistical studies have shown that the price elasticity of demand is -0.4, and the price elasticity of supply is 0.5. Using this information, derive linear demand and supply curves for the cigarette market.

  Effect of an expansionary fiscal policy

Using appropriate model, illustrate the effect of an expansionary fiscal policy in an open economy operating in free exchange rate regime. Assume perfect capital mobility. What is the effect if the government uses monetary policy alternatively?

  Major multinational company such as acme attempt to track

Major multinational company such as Acme (some of which are listed below) attempt to track the relative movements and magnitudes of global capital investment.

  Minutes required between elevator trips

From a previously answered question by you on May 14th; "The city of Clearview has decided to review how it handles the flow of tourists at Tourist Tower, the city's most popular attraction..."

  Encouraging economic growth and efficiency

Does too much of recent government regulation have the goal of behavioral change versus encouraging economic growth and efficiency?

  Partitioning idea of quicksort to give an algorithm

Use the partitioning idea of quicksort to give an algorithm that finds the median element of an array of n integers in expectedO(n) time. (Hint: must you look at both sides of the partition?)

  Market for political advertising during election campaign

Consider the market for political advertising during an election campaign. The private marginal cost of producing a political advertisement is PMC = 200 + 2q where Q is the quantity of advertisements, and the private marginal benefit (demand) curv..

  How the size of the multiplier effect

How the size of the multiplier effect could be determined by factors both in the goods and the financial market and provide a short overview of the Slovenianausterity programme, and the justification

  Are charging a relatively high tuition and using standard

Harvard, Yale and Princeton all charge relatively high tuition. Still each uses ACT and SAT score as admission criteria. Are charging a relatively high tuition and using standardized test scores inconsistent? Explain your answer

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