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

question 39

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.Graphically illustrate 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?

---

Definitions:

AWS E-11018

A specification for a type of covered electrode used in shielded metal arc welding, known for its excellent mechanical properties and crack resistance.

Kingpin

A critical pivot point in the steering mechanism of a vehicle, around which the steerable wheels rotate.

Grade 8

Refers to high-quality, high-strength fasteners made of medium carbon alloy steel, marked with six radial lines on the head.

Grade 5

A specific classification for fasteners indicating medium strength, typically made from carbon steel and used in automotive applications.