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Develop a strong taste for kelantan batik

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Reference no: EM132601006

1. If a local newspaper reported that the Malaysian government will shore up the sliding ringgit by working to cut record budget and trade deficits.

a. According to the model in this chapter, would a reduction in the budget deficit reduce the trade deficit? Would it raise the value of the Ringgit? Explain.

b. Suppose that a reduction in the budget deficit made international investors more confident in the Malaysia economy. How would this increase in confidence affect the

2. Suppose Indonesian suddenly develop a strong taste for Kelantan batik. Answer the following question in words and with diagram.

a. What happens to the demand for ringgit in the market for foreign-currency exchange?

b. What happen to the value of Ringgit in the market for foreign- currency exchange?

c. What happens to the quantity of net exports?

Reference no: EM132601006

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