Top Posters
Since Sunday
1
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
Chako Chako
wrote...
Go to Answer
Posts: 2948
Rep: 22 2
8 years ago
Assume that the government has a target value, X, for the current account surplus.
(a)   What is the goal of external balance?
(b)   Assume that we are dealing with only the short run, what are the values of P and P∗?
(c)   Given fixed P and P, what would happen if E rises?
(d)   Given P and P, what would happen if T decreases, i.e., an expansionary fiscal policy?
(e)   Given P and P, what would happen if G increases, i.e., an expansionary fiscal policy?
(f)   Given all of the above, what is the relation between the exchange rate, E, and fiscal ease, i.e., an increase in G or a reduction in T?
(g)   Assume that the economy is in external balance. What will happen if the government maintains its current account at X, but devaluates the domestic currency?
(h)   Assume that the economy is at external balance. What will happen if the government raises E?
(i)   Assume that the economy is at external balance. What will happen if the government lowers E?
Textbook 
International Economics: Theory and Policy

International Economics: Theory and Policy


Edition: 10th
Author:
Read 63 times
3 Replies
Replies
Answer verified by a subject expert
machukianmachukian
wrote...
#1
Top Poster
Posts: 2946
Rep: 36 0
8 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 220 words.
1

Related Topics

Chako Author
wrote...
#2
8 years ago
Correct!
wrote...
#3
8 years ago
Thanks for the feedback, I'm sure others will appreciate it too
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  968 People Browsing
 123 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 406
  
 307
  
 1412