Explain the advantages and disadvantages for a small open economy country to peg its currency to the US dollar. Are there any circumstances in which a small open economy country might abandon the peg and allow the currency to float against the US dollar? In your opinion, what would be the economic consequences of such a decision on the small open economy of the country?

Explain the advantages and disadvantages for a small open economy country to peg its currency to the US dollar. Are there any circumstances in which a small open economy country might abandon the peg and allow the currency to float against the US dollar? In your opinion, what would be the economic consequences of such a decision on the small open economy of the country?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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