Need help with my writing homework on Answer the question and calculate. Write a 750 word paper answering;

Need help with my writing homework on Answer the question and calculate. Write a 750 word paper answering; ASSIGNMENT-2: ECON – ASSIGNMENT-2: ECON – Question A. The Quantity Theory of Money simply links the inflation rate tothe growth rate supply of money starting with the velocity concept, which is the rate at which money circulates. it predicts a 1-to-1 relationship between changes in inflation rate and the changes in the growth rate of money. Therefore, the phrase or statement, “Fast Money Raises My Interest”, can be explained in terms of the Fisher Equation and the quantity of money theory to mean that as money changes hands fast, or frequently-when the velocity is high, results in a high demand for money. that is what “raises my interest implies. B. i. Therefore, ii. C. If the Canada has low inflation, the value of its currency rises against other currency whose inflation is high, such as Mexico in this case. Therefore, the Canadian Dollar will be stronger than the Mexican peso. meaning, a lot more Mexican peso would be required to buy one Canadian dollar. Question-2: Suppose money demand function is, A) If output (Y) grows at 3% rate, at what rate will the demand for real balances grow. assumption, nominal rates remain constant As the rate of the output Y increase at 3%, the demand for real balances, , will grow at a rate of 2% when the nominal rates remain constant B) The velocity of money in this particular economy will be 5, V=5, because Question-3: A) The type of fiscal policy that IMF needs to propose in situation where it is concerned about currency depreciation, and wants a government’s small open economy to realize currency appreciation, is proposing a flexible fiscal policy with fiscal expansion at home. This can be achieved by raising real interest rates so that domestic currency can appreciate. Given that the nominal price is sluggish, it will translate to appreciation in the rate of domestic real exchange. international competitiveness is also lost. The balance of trade also deteriorates. this limits the expansionary effects of advanced spending by the government. Given that this is a small economy, then the resulting reduced exports will offset the fiscal expansion because, capital is also internationally mobile. This implies that the fiscal multiplier will become zero. However, if the rate of exchange rate was fixed, then, the monetary policy adopted by the IMF would have to loosen a bit so that real interest rate does not increase, thus currency appreciation. This will in turn amplify fiscal expansion effects. B) The impact of the IMF proposal on the small open economy’s exchange rate illustrated graphically The graph is based on four micro economic variables S, I, r and r* in response to currency depreciation Figure 1: Impact of the IMF proposal – Flexible exchange rate -, on the small open economy’s exchange rate C) If the small open economy started from a balanced trade position, then, the trade balance will deteriorate as a result of lost international competitiveness. Question-4: Considering an economy described by Where ? the real exchange rate and r is is the real interest rate. A) i) National saving National saving refers to the output amount that is not purchased for current consumption by the government or households. In this case, we are given the government spending, the output, and the function of consumption. this allows as to solve for consumption, and thus national saving. ii) Investment It is true that investment is negatively depends on the interest rate. this equals the international rate r* of 5. Therefore, iii) Trade balance The difference between investments and savings equals Net exports, therefore. iv) Equilibrium real exchange rate The exchange rate that clears the foreign exchange market can now be calculated given that we already have solved for net exports B) In this case the same analysis as in part A) is repeated, with a new value where G rises by 500 to 1,500, we find: i) National saving ii) Investment iii) Trade balance iv) Equilibrium real exchange rate Increase in spending by the government reduces national saving. investment remains the same since the world or international real interest rate remains unchanged. This implies that domestic investment is more than domestic saving and thus part of the investment must be financed by borrowing. Inflow in capital is met by a reduction in net exports. this requires the currency to appreciate. C) With the world interest rate r* risen to 10% and G =1,000, the same steps as in A) above are repeated i) National saving ii) Investment, the world exchange rate r* is 10% iii) Trade balance iv) Equilibrium real exchange rate Compared to A) above, the national saving remains the same, however, the world interest rate results in low investment. The capital outflow is achieved by running surplus of trade, which in essence need depreciation in currency.

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10

Academic Pros