Discuss potential costs and benefits of fixed exchange rate

Assignment Help Econometrics
Reference no: EM131204782

Many countries experiencing high and rising inflation, or even hyperinflation, will adopt a fixed exchange rate regime. Discuss the potential costs and benefits of a fixed exchange rate regime in this case. Comment on fiscal discipline, seigniorage, and expected future inflation.

Reference no: EM131204782

Questions Cloud

How much does your firm expect to receive in u.s. dollars : Describe how you could use an options contract to hedge against the risk of losses associated with the potential appreciation in the U.S. dollar.
Contingency to be accrued with a charge to income : What conditions must be met for a loss contingency to be accrued with a charge to income?
Do you think the term victimless crime is misleading : A scholarly, peer-reviewed article on the type of crime covered in your selected news media report. The peer-reviewed article should identify potential costs of the crime to society as well as intervention approaches. Do you think the term victiml..
Illustrate how each of the following scenarios : The Lithuanian lita is currently pegged to the euro. Using the IS-LM-FX model for Home (Lithuania) and Foreign (Eurozone), illustrate how each of the following scenarios affect Lithuania
Discuss potential costs and benefits of fixed exchange rate : Many countries experiencing high and rising inflation, or even hyperinflation, will adopt a fixed exchange rate regime. Discuss the potential costs and benefits of a fixed exchange rate regime in this case. Comment on fiscal discipline, seigniorag..
What challenges did the team encounter : Explain how the data was collected and what modern technologies were used. Explain whether the explorative mission was successful in its findings. How can the information gathered from the mission benefit the field of oceanography?
Emotional issue affecting employees and employers : Affirmative action is both a legal and emotional issue affecting employees and employers. Develop as many arguments as you can both supporting and opposing affirmative action as an employer policy.
What is media planning : What is media planning, objectives, and strategy for advertising, and promoting the brand?
What is home''s net position in dollar denominated assets : Home's currency is the peso and trades at 1 peso per dollar. Home has external assets of $200 billion, all of which are denominated in dollars. It has external liabilities of $400 billion, 75% of which are denominated in dollars.

Reviews

Write a Review

Econometrics Questions & Answers

  Determine the annual profit or loss if units are sold

The fixed costs at Harley Motors are $1 million annually. The main product has a revenue of $8.50 per unit and $4.25 variablecost. Determine (a) the break-even quantity per year, and (b)the annual profit or loss if 200,000 units are sold and if 35..

  Determine what is the value of checkable deposits

Consider the following data. Currency $400 billion Bank reserves $500 billion (a) If banks are holding $80 billion in required reserves, and the required reserve ratio = 0.10, what is the value of checkable deposits

  What is the steady-state level of capital per worker

What is the steady-state level of output per worker? Suppose that the economy is in steady state and that, in period t, the depreciation rate increases permanently from 0.10 to 0.20.

  Calculate the equilibrium number of firms in the u.s

Why are prices in the United States different in (c) and (b)? Are consumers better off with free trade? In what ways?

  Does either player in the game have a dominant strategy

Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Each company's profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price

  What is the advertising elasticity at the sales price

The cup is placed over the pill and as the cup is pressed down, the pill is split into pieces which are contained inside the cup. Because the cup is above the pill, persons can see how the pill is cut and keep the pieces contained.

  Determine what is the euac of corporation

Quagmire Corporation wants to set up a manufacturing plant to last for 20 years. Initial costs at year 0 are $18,000 for the building and $31,000 for the equipment. At year 10 there will be a major machinery overhaul

  Determine the size of the gdp gap in percentage

Suppose the natural rate of unemployment in 2005 is 5% and the actual rate of unemployment is 9%. Use Okun's law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500B in that year

  Explain why labor union leaders are strong advocates

Using market supply and demand analysis, explain why labor union leaders are strong advocates of raising the minimum wage above the equilibrium wage.

  Calculate output-price and profit under monopoly conditions

A local business in a small college town has a major portion of their business to college bookstore. On the side they also provide services to other local businesses. The local demand is Q=200-5P. The average and marginal cost is $8.

  What was actual drop in value of the dollar over first year

At the end of 2006 an expert economist from the Global Economic Institute in Kiel, Germany, predicted a drop in the value of the dollar against the euro of 10% over the next 5 years. If the exchange rate was $1.27 to 1 euro on November 5, 2007.

  Are rye bread and wheat bread substitute or complements

Let the market demand for rye bread be given by Q = 500 I - 250Prye 400Pwheat, where Q is monthly demand in number of loaves, I is average monthly income in dollars, Prye is the price of a loaf of rye bread, and Pwheat is the price of a loaf of wh..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd