un the central bank in a large open economy.Your goal is to stabilize income, and you adjust the money supply accordingly. Under your policy, what happens to the money supply, the interest rate, the exchange rate, and the trade balance in response to each of the following shocks? a. The president raises taxes to reduce the budget deficit. b. The president restricts the import of Japanese cars.

Define and derive the monetary approach to exchange rates. Why is it called a long-run model?   Don't copy. I ll rate

the exchange rate can't be used as a monetary policy guide because?  a. the data on exchange rate is not avaliable b. the exchange rate can't be measured  c. the exhcange rate may change due to the foreign policy  d. the exchange rate is not accurate

High ,low

What impact might a central bank's decision to raise interest rates have on the exchange rate of its currency in the short term? A. The exchange rate is likely to depreciate. B. The exchange rate is likely to appreciate. C. The exchange rate will remain unchanged. D. The exchange rate will become more volatile.

Question 1It is often said by economists that fixed exchange rates make monetary policy totally ineffective as a stabilization tool. Explain why you agree or disagree with this statement. Assume an open economy. Keynes favoured fiscal policy over monetary policy to stabilize the economy and fixed exchange rates over flexible exchange rates. Is it consistent or inconsistent to pair fiscal policy with fixed exchange rates and monetary policy with flexible exchange rates? Explain why.

Please help me with these question. Thank you 1. Many countries experiencing high and rising inflation, or even hyperinflation, will adopt afixed exchange rate regime. Discuss the potential costs and benefits of a fixed exchange rateregime in this case. Comment on fiscal discipline, seigniorage, and expected future inflation. 2. In the late 1970s, several countries in Latin America, notably Mexico, Brazil, and Argentina,had accumulated large external debt burdens. A significant share of this debt wasdenominated in U.S. dollars. The United States pursued contractionary monetary policy from1979 to 1982, raising dollar interest rates. How would this affect the value of the LatinAmerican currencies relative to the U.S. dollar? How would this affect their external debt inlocal currency terms? If these countries had wanted to prevent a change in their external debt,what would have been the appropriate policy response, and what would be the drawbacks?  3. The economic costs of currency crises…

With a fixed exchange rate, what would be effective stabilization policy during a recession? O Expansionary fiscal policy O Contractionary fiscal policy O Expansionary monetary policy O Contractionary monetary policy