Apr 03, 2023
Instructions to students: All questions are compulsory
Materials:
Dictionaries are not permitted
TASK: EC3012 International Finance Assignment
Question 1:
a)Compare the effects of a devaluation according to:
- The Monetary Approach to the Balance of Payments.
- The Elasticities Approach to the Balance of Payments.
b)Assess critically which assumptions are behind the main differences in the effects of a devaluation according to the two models.
Question 2:
Analyze the effects of a sterilized foreign exchange operation/ intervention according to:
a) The Portfolio balance model.
