ECS3703 Assignment 2 Semester 1 2024 ... 100 % TRUSTED workings, explanations and solutions. For assistance call or W.h.a.t.s.a.p.p us on +/ 2/ 5/ 4 /7 /7 /9 /5 /4 /0 /1 /3 /2 .
Assignment 02 (semester 1)
THIS ASSIGNMENT IS COMPULSORY. THE MARKS YOU OBTAIN FOR IT
WILL, CONTRIBUTE TO YOUR SEME...
, Assignment 02 (semester 1)
THIS ASSIGNMENT IS COMPULSORY. THE MARKS YOU OBTAIN FOR IT
WILL, CONTRIBUTE TO YOUR SEMESTER MARK, AND HAVA A WEIGHT OF
60%. NO EXTENSION FOR THE SUBMISSION OF THIS ASSIGNMENT CAN BE
CONSIDERED.
Assignment 2
Question 1[25]
Assume Nation A operates under a flexible exchange rate system, the principle of
imperfect capital mobility, and desires to achieve both the internal and external balance.
(a) Which macroeconomic policy should Nation A use to simultaneously
achieve internal and external balance and why? ………………….………(7)
(b) With the aid of a diagram, briefly explain how Nation A can use the policy
mentioned in (a) to achieve the internal and external balance…………...(18)
Question 2 [10]
Discuss each of the following arrangements, and explain the difference [10]
(a) a fixed exchange rate system………………………………………………(3)
(b) a currency board arrangement………………...…………………………..(4)
(c) dollarization………………………………………………………………….(3)
Question 3 [15]
With the aid of a diagram, explain the effect of trade balance changes on aggregate
demand in an open economy with flexible exchange rates.
Open Rubric
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