Answer to Question #49353 in Macroeconomics for shana

Question #49353

If lower exchange rate spurs exports then why wouldn’t it be a good idea of policy
makers to intervene to push the exchange rate as low as they can. Discuss

Expert's answer

Lower exchange rate really spurs exports and the total business activity in the economy. But it wouldn’t be a good idea of policy makers to intervene to push the exchange rate as low as they can, because very low rates and fast increase of business activity will cause the increase of inflation level, which is not good for the economy and may create the inflationary gap. That's why exchange rate should not be as low, as possible.

Learn more about our help with Assignments: Macroeconomics

Comments

Assignment Expert

25.11.14, 19:49

Dear shana, You're welcome. We are glad to be helpful. If you liked our service please press like-button beside answer field. Thank you!

shana

25.11.14, 17:51

thanks for the assistance it was really helpful

Leave a comment

Related Questions

Who Can Help Me with My Assignment

There are three certainties in this world: Death, Taxes and Homework Assignments. No matter where you study, and no matter…
How to Finish Assignments When You Can’t

Crunch time is coming, deadlines need to be met, essays need to be submitted, and tests should be studied for.…
How to Effectively Study for a Math Test

Numbers and figures are an essential part of our world, necessary for almost everything we do every day. As important…