ECS3703
Assignment 1 Semester 1 2024
Unique Number:
Due Date: March 2024
Question 1
Assume Nation A operates under a flexible exchange rate system, the principle of
imperfect capital mobility and desires to achieve both internal and external balance.
a) Which macroeconomic policy should Nation A use to simultaneously achieve internal
and external balance and why?
Nation A should use a combination of fiscal and monetary policy to achieve both internal
and external balance.
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