Suppose That the International Monetary Fund (IMF) Is Concerned About

question 24

Essay

Suppose that the International Monetary Fund (IMF) is concerned about currency depreciation in a small open economy.
a. What type of fiscal policy should the IMF propose to the government of the small open economy to generate a currency appreciation?
b. Illustrate graphically the impact of the IMF proposal on the exchange rate of the small open economy.
c. What will happen to the trade balance of the small open economy, assuming that it started from a position of balanced trade?

Recognize the importance of perspective and constructive outlook towards evaluations and feedback.

Understand the need to prepare for a variety of question types on tests.

Develop a constructive approach to analyzing and using test results for improvement.

Understand the roles and obligations of parties involved in certified checks and drafts.

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