Engineering homework help
Engineering homework help. 2. (a) If the U.S. economy is operating near full employment and the exchange rate increases (the dollar appreciates), explain why the Federal Reserve will be less inclined to raise interest rates. (b) In a flexible rate system, explain why a country whose income grows faster than that of its trading partners can expect its exchange rate to fall or the value of its currency to depreciate. Ans2(a) If the U.S. economy is operating near full employment and the exchange rate increases (the dollar appreciates) then imports becomes cheaper and thus thereis trade deficit. A trade deficit…
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