The Zambian economy has been facing escalating inflationary amid weakening of the Zambian Kwacha. In an attempt to arrest the situation, Dr. Kalyalya and his Monetary Policy Committee have been tightening monetary policy through rising the policy rate and statutory reserve. Assuming the Zambian can be modelled using the IS-LM-BOP Model, discuss and show the effects of these actions on the Zambian Economy under the current Exchange Rate Regime and External Sector policies. NOTE: Be sure to show all relevant graphs, shifts of curves, changes to important variables. EXPLAIN. Provide both graphs and full explanation.

The Zambian economy has been facing escalating inflationary amid weakening of the Zambian Kwacha. In an attempt to arrest the situation, Dr. Kalyalya and his Monetary Policy Committee have been tightening monetary policy through rising the policy rate and statutory reserve. Assuming the Zambian can be modelled using the IS-LM-BOP Model, discuss and show the effects of these actions on the Zambian Economy under the current Exchange Rate Regime and External Sector policies. NOTE: Be sure to show all relevant graphs, shifts of curves, changes to important variables. EXPLAIN. Provide both graphs and full explanation.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: International Finance

Section: Chapter Questions

Problem 14QP

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The Zambian economy has been facing escalating inflationary amid weakening of the Zambian Kwacha. In an attempt to arrest the situation, Dr. Kalyalya and his Monetary Policy Committee have been tightening monetary policy through rising the policy rate and statutory reserve. Assuming the Zambian can be modelled using the IS-LM-BOP Model, discuss and show the effects of these actions on the Zambian Economy under the current Exchange Rate Regime and External Sector policies.
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