3. Poundland and Dollarland are two hypothetical countries that trade freely with each other. The currency used in Poundland is called "pound", and the currency used in Dollarland "dollar". The pound is pegged to the dollar. The government of Poundland decides to revalue its currency relative to the dollar. Discuss what will happen to the current account balance of Poundland in the months immediately after the revaluation. 1300/1

3. Poundland and Dollarland are two hypothetical countries that trade freely with each other. The currency used in Poundland is called "pound", and the currency used in Dollarland "dollar". The pound is pegged to the dollar. The government of Poundland decides to revalue its currency relative to the dollar. Discuss what will happen to the current account balance of Poundland in the months immediately after the revaluation. 1300/1

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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