Suppose That the Large Industrial Countries of the World Are

question 30

Essay

Suppose that the large industrial countries of the world are concerned about the depreciating currencies of a number of small open economies.
a. What type of fiscal policies must the large industrial countries undertake in order to promote currency appreciation in the small open economies?
b. Illustrate graphically the impact of the industrial countries' policies on the exchange rate of the small open economies.
c. What will happen to the trade balance of the typical small open economy, assuming that it starts from a position of balanced trade?

---

Definitions:

Vertically Integrated

A business structure in which a company controls multiple stages of production or distribution within the same industry.

Net Marginal Revenue

The additional revenue generated from selling one more unit of a product or service after accounting for the marginal cost of producing that unit.

Real-Estate Purchase Agreement

A legally binding contract between a buyer and seller detailing the terms and conditions of the sale of property.

Writing Approach

The method, style, or technique adopted by a writer to convey their message or story.