Explain how changes in exchange rates impact the economy through the aggregate demand- aggregate supply (AD/AS) model. Explain how fluctuations in exchange rates can influence loans and banks. (16.3) 17. Contrast floating exchange rates, a soft peg, hard peg, and merged currency as options that a country’s economy has in terms of managing it’s exchange rate relative to the rest of the world. For each, give a benefit as well as a drawback. (16.4)

Explain how changes in exchange rates impact the economy through the aggregate demand- aggregate supply (AD/AS) model. Explain how fluctuations in exchange rates can influence loans and banks. (16.3) 17. Contrast floating exchange rates, a soft peg, hard peg, and merged currency as options that a country’s economy has in terms of managing it’s exchange rate relative to the rest of the world. For each, give a benefit as well as a drawback. (16.4)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 27CTQ: Suppose a country has an overall balance of trade so that exports of goods and services equal...

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