--%>
Assignment Help - homework help

Government Pegged Currencies

Question:

If a government pegs the value of its currency to another currency, the government must stand ready to i. _________________________ the "hard" currency to defend the pegged value of its own currency. ii. Briefly Explain?

Answer:

Suppose the value of one of the pegged currencies falls. In that case, the businesses in that country will see an unprecedented increase in their costs and hence, might incur heavy losses. This might affect the sector and the economy as a whole adversely. In that case, the government and the central bank of that country must be ready to provide the currency against which its own currency is pegged so that the depreciation is controlled.

 

 

   Related Questions in Business Economics

  • Q : Explain the Trade pattern of U.S. and

    Explain the Trade pattern of U.S. and World Trade?

    		•
  • Q : Argument by Adam Smith for a true

    Within the Wealth of Nations, argument by Adam Smith such that a nation’s true wealth is its capability to: (1) obtain stocks of financial capital. (2) inspire its people’s courage and diligence. (c) give

    		•
  • Q : Utility functions to calculate scores

    Question: 1. Nancy is taking a course in Fairy Tales from Professor Grimm and another in Philosophy from Professor Par. In each course there will be two exams, a midterm exam and a final exam. In Professor Grimm's

    		•
  • Q : Sources of not tax revenue Provide some

    Provide some sources of not tax revenue? Answer: Escheat, income from public enterprises, special assessment, fees and fines and so on.

    		•
  • Q : Illustrate the Optimal or best

    Illustrate the Optimal or best product-mix and also Law of increasing opportunity costs?

    		•
  • Q : Production function for the game

    Question Can you describe what the production function for the game looks like? (How are labour, capital and resources combined? Are there constant, increasing or decreasing returns to scale?) Answer

    Q : Favor laissez- faire economic policies

    Favor laissez- faire economic policies tended by Adam Smith, who also: (w) saw the requirement for several state intervention. (x) believed there were no conditions in which the government must intervene. (y) supported most government

    		•
  • Q : What do you mean by Linkages What do

    What do you mean by Linkages?

    		•
  • Q : Introduction of the term Financial

    Give a brief introduction of the term Financial Leverage?

    		•
  • Q : Checkout problem A grocery store chain

    A grocery store chain is considering ways to improve the performance of the waiting lines at their checkout stands. A heavily trafficked checkout stand is monitored for 120 min. In that period, 60 customers have their groceries rung up, and depart from the store. The

    		•