ECS3703
ASSIGNMENT 2 SEMESTER 2 2023
, Question 1 [25]
Suppose the Sub-Saharan African region intends to adopt a common currency
for its member countries as it would be economically beneficial for the
participants (nations).
(a) What is this arrangement called……………………….…………………… (2)
(b) In your view, would the Sub-Saharan African region have any chance of
benefiting from this kind of arrangement, and why?.................................(10)
(c) Discuss the risks and benefits associated with the adoption of a common
currency……………………….…….…….…………………….……………. (13)
Question 2 [25]
Nation A is a small nation that operates under the principle of free movement
of capital and fixed exchange rates. The country desires to reach the full-
employment level of national income with equilibrium in its balance of
payments.
(a) Which relevant macroeconomic policy would you advise nation A to use to
achieve this and why?................................................................................. (5)
(b) With the aid of a graph, explain how the nation should use the relevant
policy mentioned in (a) to achieve the full-employment level of national income
with equilibrium in its balance of payments……………………………………….
(20)
ASSIGNMENT 2 SEMESTER 2 2023
, Question 1 [25]
Suppose the Sub-Saharan African region intends to adopt a common currency
for its member countries as it would be economically beneficial for the
participants (nations).
(a) What is this arrangement called……………………….…………………… (2)
(b) In your view, would the Sub-Saharan African region have any chance of
benefiting from this kind of arrangement, and why?.................................(10)
(c) Discuss the risks and benefits associated with the adoption of a common
currency……………………….…….…….…………………….……………. (13)
Question 2 [25]
Nation A is a small nation that operates under the principle of free movement
of capital and fixed exchange rates. The country desires to reach the full-
employment level of national income with equilibrium in its balance of
payments.
(a) Which relevant macroeconomic policy would you advise nation A to use to
achieve this and why?................................................................................. (5)
(b) With the aid of a graph, explain how the nation should use the relevant
policy mentioned in (a) to achieve the full-employment level of national income
with equilibrium in its balance of payments……………………………………….
(20)
