suppose we have a country w/ fixed exchange rate regime. the country just experienced a natural disaster
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Question:
suppose we have a country w/ fixed exchange rate regime. the country just experienced a natural disaster (SRAS curve shift inward).
a) should they devaluate or revaluate their currency to resolve inflation issue?
b) what would the country do with its currency?explain and show on graph (w/ exchange rate on y-axis, countries currency in x-axis)
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