currency

Question 1

currency volitality

Answer 1

the frequency and extent of changes in a country currency value

Question 2

impact of depreciation on inflaiton

Answer 2

high import prices _ high consumer prices_ threatens living standards

Question 3

impact of depreciation on economic growth

Answer 3

weak currency _ stimulus to gdp growth_ higher net exports_ depends on PED

Question 4

impact of depreciation on unemployment

Answer 4

competitive currency_ higher domestic production_ positive export multiplier effect

Question 5

impact of depreciation on BOP

Answer 5

dependent on PED for X/M_ J curve effect in short run

Question 6

diagram analysis for depreciation

Answer 6

1) -shift s1 to s2 of currency, quantity of currency traded drops q1-q2

2)rise in net exports AD1-AD2
higher import prices SRAS1 to SRAS2
GPL3 AND Q3