ECS3703 Assignment 2 (COMPLETE ANSWERS) Semester 1 2024

ECS3703 Assignment 2 (COMPLETE ANSWERS) Semester 1 2024 ... 100 % TRUSTED workings, explanations and solutions. For assistance call or W.h.a.t.s.a.p.p us on +/ 2/ 5/ 4 /7 /7 /9 /5 /4 /0 /1 /3 /2 . Assignment 02 (semester 1) THIS ASSIGNMENT IS COMPULSORY. THE MARKS YOU OBTAIN FOR IT WILL, CONTRIBUTE TO YOUR SEMESTER MARK, AND HAVA A WEIGHT OF 60%. NO EXTENSION FOR THE SUBMISSION OF THIS ASSIGNMENT CAN BE CONSIDERED. Assignment 2 Question 1[25] Assume Nation A operates under a flexible exchange rate system, the principle of imperfect capital mobility, and desires to achieve both the internal and external balance. (a) Which macroeconomic policy should Nation A use to simultaneously achieve internal and external balance and why? ………………….………(7) (b) With the aid of a diagram, briefly explain how Nation A can use the policy mentioned in (a) to achieve the internal and external balance…………...(18) Question 2 [10] Discuss each of the following arrangements, and explain the difference [10] (a) a fixed exchange rate system………………………………………………(3) (b) a currency board arrangement………………...…………………………..(4) (c) dollarization………………………………………………………………….(3) Question 3 [15] With the aid of a diagram, explain the effect of trade balance changes on aggregate demand in an open economy with flexible exchange rates.