In the 1990s, a majority of post-socialist countries adopted
fixed exchange rate policies. How would you...
In the 1990s, a majority of post-socialist countries adopted
fixed exchange rate policies. How would you describe a possible
reasoning behind it? Why most of those countries eventually
cancelled those polisies.
Topic: exchange rate regime in developing countries (Russia and
Kazakhstan)
How selected countries Exchange Rate Regimes are changing during
year 2020?
Consider the following open economy in which the real exchange
rate is fixed and equal to one. Saving, investment, government
spending, taxes, imports and exports are given by:
S = −156+0.18Y
I = I and G = G (have a horizontal line at the top of two
letters on the right side.)
T = T0 +0.1Y
Q = q1Y and X = X
where T0 is the level of autonomous taxes, and q1 is the
marginal propensity to import. Let...
Before 1990s, nearly all socialist countries have planned
economy. Since 1990, China started to introduce markets and private
sectors. Do you think Chinese economic system is market socialism
or not?
You have received a number of questions regarding fiscal,
monetary, and exchange rate policies and how they can be used to
stimulate and sustain economic growth in Africa. Prepare a paper
that you will distribute responding to these questions.
Hint: Discuss each of the policies using the demand and supply
side effects of the various policies also the limitations of each.
Each policy discussion is 10 marks
[30 marks]
Recall the Trilemma. Using that knowledge, explain why fixed
exchange rate regimes which have international capital mobility do
not have an independent monetary policy.
Russia and South Korea experienced exchange rate crises in the
late 1990s, but their response was markedly different. First,
Russia experienced a dramatic decrease in the value of the Russian
ruble relative to the U.S. dollar in 1998. The Russian government
responded by suspending payments on foreign debt. Similarly, South
Korea experienced a decrease in the value of the won in 1997. In
contrast, South Korea did not default on its debt.
Why might these two countries have behaved differently...