3. Poundland and Dollarland are two hypothetical countries that trade freely with each other. The currency used in Poundland is called "pound", and the currency used in Dollarland "dollar". The pound is pegged to the dollar. The government of Poundland decides to revalue its currency relative to the dollar. Discuss what will happen to the current account balance of Poundland in the months immediately after the revaluation. 1300/1

3. Poundland and Dollarland are two hypothetical countries that trade freely with each other. The currency used in Poundland is called "pound", and the currency used in Dollarland "dollar". The pound is pegged to the dollar. The government of Poundland decides to revalue its currency relative to the dollar. Discuss what will happen to the current account balance of Poundland in the months immediately after the revaluation. 1300/1

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter18: International Trade And Finance

Section: Chapter Questions

Problem 14SQ

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