--%>
Assignment Help - homework help

Fixed or managed exchange rate

Question:

A country with a fixed or managed exchange rate would consider i.___________________ its currency to gain competitive advantage vis-à-vis its trade partners.
ii. Briefly Explain?

Answer:

The country will devalue its currency. Devaluation will lead to lowering of cost of the export goods of the country while increasing the cost of the imports. This will boost export demand and curtail imports demand. Consequently, the trade balance will improve.

   Related Questions in Business Economics

  • Q : Illustrate several theories about

    Illustrate several theories about causation?

    		•
  • Q : Reason of Economic problem Why an

    Why an economic problem does arise? Answer: It arises due to following reasons: A) Shortage of resources. B) Alternative utilizations of resources. C) Limitless wants and limited resources.

    		•
  • Q : Illustrate major economic flows that

    Illustrate major economic flows that link U.S. with nations.  Provide an example to illustrate each flow.  Explain the relationship between the top and bottom flows.

    		•
  • Q : Wealth of Nations academic

    By the perspective of nowadays academic standards, Adam Smith must have more evidently acknowledged that several the analyses and insights for that he took credit within his Wealth of Nations had really been gleaned from the writings

    		•
  • Q : Problem on prisoners dilemma game Lets

    Lets assume an infinitely repeated prisoner’s dilemma game by two players. The resulting payoffs at each phase by the actions of two players are illustrated below in the table (payoffs are symbolized like (payoff for player 1, payoff for player 2)). Two players

    		•
  • Q : Assertion to increase in the minimum

    Use the circular flow model to confirm this assertion for a $1 per hour increase in the minimum wage?

    		•
  • Q : Main advantage of EVA The main

    The main advantage of using EVA is that it is simple to calculate and understand. It uses simple measures like operating profits and cost of capital terms which are widely known and accepted in the financial arena. It helps the managers to assess thei

    		•
  • Q : Depreciation of the euro change the

    If the European euro declines in value (depreciates) in the foreign exchange market, would it be easier or harder for the French to sell their wine in the United States?  Suppose you were planning a trip to Paris.  How would the depreciation of the euro chan

    		•
  • Q : What do you mean by the term United

    What do you mean by the term “United State in Global Economy”?

    		•
  • Q : Assertion for the levying of a tax on

    Use the circular flow model to confirm this assertion for the levying of a tax on air polluters?

    		•