Explain what is meant by the unholy trinity

Assignment Help Business Economics

Reference no: EM131387976

Explain what is meant by the Unholy Trinity. Let’s assume that we live in a world in which capital cannot move freely across international borders, that is, we have instituted capital controls (which was the case during the Bretton Woods era). How does the Unholy Trinity help us explain why the United States could pursue a contractionary monetary policy (a reduction in the money supply) and France an expansionary monetary policy (an increase in the money supply) during the Bretton Woods era? What was likely to happen to the value of the dollar as a result of monetary expansion in response to the 2008–09 economic crisis in the United States? Justify your answers.

Reference no: EM131387976

Questions Cloud

Characterized international monetary relations : Three exchange rate regimes have characterized international monetary relations in the 20th century: fixed, floating, and managed. What is meant by these terms? What kind of a system was Bretton Woods? Could the life of the Bretton Woods system have ..

Determining the current yield : A $1000 par value bond with an 18.09 coupon rate, currently selling for $1135, has a current yield of_____________. Round answer to two decimal places in percentage form

Discuss three explanations for shift in economic strategy : In 1963, South Korea abandoned its former emphasis on import-substitution industrialization (ISI) in favor of export-oriented industrialization (EOI). Discuss three explanations for this shift in economic strategy. Which is the more convincing? Justi..

What is the bonds current yield : You paid $1181 for a corporate bond that has a 14.17 percent coupon rate. What is the bonds current yield?

Explain what is meant by the unholy trinity : Explain what is meant by the Unholy Trinity. Let’s assume that we live in a world in which capital cannot move freely across international borders, that is, we have instituted capital controls. What was likely to happen to the value of the dollar as ..

Retained earnings and the wacc : Find the WACC using retained earnings and the WACC when new equity is issued.* A company has a WACC1=12.5% for funding up to $4 million when retained earnings are used.They also have a WACC2=13.7% for funding above $4 million when new equity is ra..

Discuss the main features of the realist-mercantilist : Why are some countries poor (less developed) and others rich (developed)? Discuss the main features of the realist/mercantilist, liberal, Marxist, and structuralist/dependency perspectives on economic development. What are their differences and simil..

Causes and consequences of latin american debt crisis : Discuss the causes and consequences of the Latin American debt crisis of the 1980s and the Asian financial crisis of 1997-98. How were these crises different? How was this possible and why did Malaysia reject the suggested reforms?

What are one example of monopolistically competitive firm : What are one example of a monopolistically competitive firm, oligopoly, and monopoly in your local area? In your example, please relate to the market characteristics of each of the market structures?

User Account

All Pages