A). Discuss the benefits and costs of joining a fixed-exchange area. Explain the concept of optimal currency areas. (B). Diagram 1: The GG-LL model Use the GG -LL diagram to show how an increase in the size and frequency of unexpected shifts in a country's money demand function affects the level of economic integration with a currency area at which the country will wish to join.

A). Discuss the benefits and costs of joining a fixed-exchange area. Explain the concept of optimal currency areas. (B). Diagram 1: The GG-LL model Use the GG -LL diagram to show how an increase in the size and frequency of unexpected shifts in a country's money demand function affects the level of economic integration with a currency area at which the country will wish to join.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 1SCQ: If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account...

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If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account balance?
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