Answer to Question #245435 in Macroeconomics for Jenson

Question

The cedi is the best performing currency in the world against the US dollar. This is according to Vice President Dr. Mahamudu Bawumia.

The cedi depreciation, which has been a major problem in the country over the years, has even led to the inauguration of the FX Development Committee to tackle issues relating to the depreciation of the cedi and find solutions to them.

QUESTIONS

1.     How is Ghana positioned to increase the value of the cedis? (5 marks)

2.     Do you think there is a conflicting role between BOG and FX Development committee? (Please give reasons for your answer) (5 marks)

3.     Controls on imports and/or foreign exchange dealing has been one of the arguments used in maintaining fixed exchange rate. What problems might arise if the government were to

adopt this method of maintaining a fixed exchange rate? (10 marks)

Answer 1

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