Q 2. Consider the case of Pakistan the small open economy, in the following situations how the nominal exchange rate, real exchange rate and trade balance behave. a. Because of uncertain situation consumers are not ready spend more and making saving. b. Government is doing more tax reforms, investors are more hopeful and going to start business in country. c. Pakistani people are going to prefer the China leather than Pakistani leather.

Q 2. Consider the case of Pakistan the small open economy, in the following situations how the nominal exchange rate, real exchange rate and trade balance behave. a. Because of uncertain situation consumers are not ready spend more and making saving. b. Government is doing more tax reforms, investors are more hopeful and going to start business in country. c. Pakistani people are going to prefer the China leather than Pakistani leather.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 8PA

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