Move into deficit add question here essay 1 points

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Add Question Here Essay 1 points Question Suppose that the International Monetary Fund (IMF) is concerned about currency depreciation in a small open economy. a. What type of fiscal policy should the IMF propose to the government of the small open economy to generate a currency appreciation? b. Illustrate graphically the impact of the IMF proposal on the exchange rate of the small open economy. c. What will happen to the trade balance of the small open economy, assuming that it started from a position of balanced trade?
Add Question Here Essay 1 points Question The government of a small open economy wishes to promote trade policies that will result in currency appreciation. a. Would protectionist policies (higher tariffs and more quotas) or freer trade policies (tariff reductions and quota eliminations) be more effective in generating currency appreciation? 26 of 30 12/8/2012 11:36 م
b. Illustrate graphically the impact of the trade policy on the exchange rate of the small open economy. c. What will happen to the trade balance of the small open economy as a result of the trade policies, assuming that the country started from a position of free trade? d. What will happen to the quantity of exports and imports as a result of the trade policies?
Add Question Here Essay 1 points Question Compare the impact of an increase in the government's budget deficit on investment spending in a small open economy with an otherwise comparable closed economy. Assume prices are flexible and that factors of production are fully employed in both economies. Assume there is perfect capital mobility for the small open economy.

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