Tutorial 12_2011 - ECON1002 Introductory Macroeconomics, S1...

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ECON1002 Introductory Macroeconomics, S1 2011 Tutorial Tasks 1 R EADING G UIDE : BOF C HAPTERS 16 AND 17. Y OU SHOULD ALSO LOOK OVER YOUR LECTURES NOTES FOR W EEK 12. K EY C ONCEPTS : F IXED EXCHANGE RATE , F UNDAMENTAL V ALUE OF THE EXCHANGE RATE , SPECULATIVE ATTACKS , SAVING , INVESTMENT AND THE C URRENT ACCOUNT , CAPITAL FLOWS , T WIN D EFICITS H YPOTHESIS . T UTORIAL P ROBLEMS *N OTE : S TUDENTS ARE REQUIRED TO SUBMIT WRITTEN ANSWERS TO P ROBLEM (S) MARKED WITH ASTERISKS (*) IN THEIR DESIGNATED TUTORIAL CLASSES . 1. Use a demand and supply diagram to illustrate the effects of a speculative attack on an overvalued exchange rate. *2. Use a diagram to illustrate the effects of each of the following on the capital investment of a country that is a net borrower from abroad. a. Investment opportunities improve owing to new technologies. b. The government budget deficit rises. c. Domestic citizens decide to save more d. Foreign investors believe that the riskiness of lending to the country has
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This note was uploaded on 08/18/2011 for the course ECON 1002 taught by Professor Markmelatos during the Three '10 term at University of Sydney.

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Tutorial 12_2011 - ECON1002 Introductory Macroeconomics, S1...

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