Question: What will be the effects on the domestic economy under
What will be the effects on the domestic economy under free-floating exchange rates if there is a rapid expansion in world economic activity? What will determine the size of these effects?
Answer to relevant QuestionsImagine that you won millions of pounds on the National Lottery. Would your ‘economic problem’ be solved?If you were the owner of a clothes shop, how would you set about deciding what prices to charge for each garment at the end-of-season sale?For what reasons might the exchange rate diverge from the purchasing-power parity rate over the longer term?Assume that countries in the Eurozone decide to pursue a deflationary fiscal policy. What effect is this likely to have on the UK economy?Compare the relative merits of using GNY statistics with those of various basic needs indicators when assessing both the level and the rate of a country’s economic development.
Post your question