Exchange rate and bop relationship what happens in the case, Ask an Expert

Economics

Exchange rate and BOP relationship. What happens in the case: Current account deficit of $500 billion, financial account surplus of $300 billion? Ignoring statistical discrepancy, Show in words and a graph what will happen in the following two cases?

1) The exchange rate system if flexible where market supply and demand determines exchange rate.

2) The system is fixed exchange rate system. What should the Central Bank do to restore the balance of payment?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91236894

Have any Question?Write your Review or question?

Related Questions in Microeconomics

1price elasticity of demandathenbspprice elasticity of

1. Price elasticity of demand a. The price elasticity of demand measures: b. T F Demand is elastic when the percent change in quantity demanded times the percent change in price is greater than 1 . c. Extreme c ...

Question - janice really likes potatoes at best any other

Question - Janice really likes potatoes. At best any other goods are worth less than a dollar to her, potatoes cost $1.00 per pound, and she has $6.00 that she could possibly spend on potatoes or other items. Suppose she ...

Discuss various means by which island governments in the

Discuss various means by which Island Governments in the South Pacific can institute reforms with respect to Government Trading Enterprises for maximum gains to both productive and allocative efficiency.

Question a treasury bond pays 9 coupon pa on june 12 the

Question: A treasury bond pays 9% coupon p.a. On June 12, the bond has 63 days to the next coupon payment and there are 297 days since the last coupon payment (assume that there are 360 days in a year). Since the last co ...

Question you and your friend have opened an account on

Question: You and your friend have opened an account on E-Trade and have each decided to select five similar companies in which to invest. You are diligent in monitoring your selections, tracking prices, current events, ...

Question how does a government agency raise revenue

Question: How does a government agency raise revenue differently from a private company, and how does that affect the way government decisions are made, compared to business decisions? The response must be typed, single ...

Question some large power plants are mine-mouth facilities

Question: Some large power plants are mine-mouth facilities, located at the opening of the coal mine that will supply their fuel. In areas with few coal mines, both the power plant and the mine are likely to be under the ...

Question consumer service at sce consists of handling

Question: Consumer service at SCE consists of handling outages, resolving bill disputes, extending service to new customers, and similar activities. Consumer service is a major functional department of the company, but t ...

Question from 2000 to 2002 the sharp decline in capital

Question: From 2000 to 2002, the sharp decline in capital spending was almost completely matched by the sharp decline in government saving. (A) How do you think the overall economy would have responded? However, suppose ...

Question explain the difference in the distribution

Question: Explain the difference in the distribution mechanism for goods and services in the market and command systems. Discuss the implications of this difference in terms of efficiency. The response must be typed, sin ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert