Krone free to float against the non-euro currencies, International Economics

Assignment Help:

Q. Illustrate why when Norway unilaterally fixes its exchange rate against the euro but leaves the krone free to float against the non-euro currencies, it is unable to keep at least some monetary independence.

Answer: Any independent money supply vary in Norway would put pressure on krone interest rates and therefore on the krone/euro exchange rate. Therefore by pegging the krone even to a single foreign currency Norway completely surrenders its domestic monetary control.


Related Discussions:- Krone free to float against the non-euro currencies

Explain the heckscher-ohlin model and ho model , 1. Explain Pierre Bourdieu...

1. Explain Pierre Bourdieu's concepts of field, habitus, doxa, and symbolic violence. How do these concepts clarify the continued dominance of neoclassical analysis in mainstream e

Modes of Entry and Internalisation, Although the elegance and comprehensive...

Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with a powerful logic (Rugman, 1981, 1985), it is still defici

Show albanias comparative advantage, Q. Now, consider that the relative pr...

Q. Now, consider that the relative price of A is actually not higher than Albania's autarkic level of 1, but quite the opposite (e.g. PA/PB = 0.5). Could Albania still be able t

Wholesale price index and industrial production, Q. The following table in...

Q. The following table introduces the relationship between wholesale price index and industrial production changes between the years 1929 - 1935. What is the purpose of the given

Monopolistic Competition, Suppose that industry 1 is monopolistically compe...

Suppose that industry 1 is monopolistically competitive, with a CES sub-utility function: U(c1,c2 ) = c1? + c?2 , 0 We let the marginal costs be denoted by c1(w,r), and the fixe

International trade, why is international trade important for south africa

why is international trade important for south africa

Independent variable, Foreign Direct Investment Theoretical Definition:...

Foreign Direct Investment Theoretical Definition: The causal (independent) variable is the inward Foreign Direct Investment (FDI) to the technology sector. Foreign direct i

Economy under fixed and floating exchange-rate regimes, Q. Use the DD - AA ...

Q. Use the DD - AA model to examine and compare the response of an economy under fixed and floating exchange-rate regimes to a temporary fall in foreign demand for its exports.

Write Your Message!

Captcha
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