4. A country has a fixed exchange rate and capital is very mobile. Because it is experiencing high unemployment, the central bank increases the money supply. Using symbols and words, explain what will happen to (a) internal balance; (b) external balance; (c) the country's exchange rate. How must the central bank respond if it wishes to maintain the fixed exchange rate? Why is monetary policy said to be ineffective with fixed exchange rates and capital mobility? 5. In the example above (#4), the government decides to increase spending on public works to create jobs. How does this affect internal and external balance and the exchange rate? Why is fiscal policy said to be effective with fixed exchange rates and capital mobility?

4. A country has a fixed exchange rate and capital is very mobile. Because it is experiencing high unemployment, the central bank increases the money supply. Using symbols and words, explain what will happen to (a) internal balance; (b) external balance; (c) the country's exchange rate. How must the central bank respond if it wishes to maintain the fixed exchange rate? Why is monetary policy said to be ineffective with fixed exchange rates and capital mobility? 5. In the example above (#4), the government decides to increase spending on public works to create jobs. How does this affect internal and external balance and the exchange rate? Why is fiscal policy said to be effective with fixed exchange rates and capital mobility?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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estnavclient.psonsVc.net/#/question/4985ff31-8b4a-4423-8092-062ae41fb329/a5b5e518-23e9-4a64-b3f9-30a82b80e42f Review - A Bookmark Sunuwar, Alka 8 Africa Economics Test / 13 of 27 II Pause Use the information in the box to answer the question. Some industries in South Africa, such as housing and healthcare, are controlled by the government. Most industries, however, such as mining, agriculture, and manufacturing, are controlled by the private sector, and have helped South Africa become a major economic power in Africa. Based on the information, what conclusion can be drawn about the South African economy? O A. South Africa has a pure market economy. O B South Africa has a pure command economy. OC South Africa has a command economy with some market elements. D. South Africa has a market economy with some command elements. 3:52 PM e Schoolnet : M... TN TestNav - Goo. G 的M 感) O Type here to search 72°F 2/24/2022 Lenovo 近

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