Hi, I need help with essay on Problem set: Exchange rates and open-economy macroeconomics. Paper must be at least 500 words. Please, no plagiarized work!
As such what can be expected is “a temporary increase in fiscal expansion and rise in output thereby resulting into currency appreciation.”3 But when it is a permanent tariff, initially one can expect an aggressive movement in the market resulting into employment. However, in the long- run, “output returns to its initial level and all money prices rise in proportion to the increase in money supply.“
2. Suppose there is a permanent fall in private aggregate demand for a country’s output (a downward shift of the entire demand schedule). What is the effect in the output? What government policy response would you recommend?

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