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Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
Edition 6ISBN: 978-1111822354Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
Edition 6ISBN: 978-1111822354 Exercise 3
Let the demand and supply of Philippine pesos each month be described by the following equations:
Demand for pounds =100 - 2000 e
Supply of pounds = 20 + 3000 e
where the quantities are millions of pesos, and e is dollars per peso.
a. Find the equilibrium exchange rate.
b. Suppose the Philippine central bank wants to fix the exchange rate at 50 pesos per dollar and keep it there. Should the Philippine central bank buy or sell its own currency? How much per month?
Demand for pounds =100 - 2000 e
Supply of pounds = 20 + 3000 e
where the quantities are millions of pesos, and e is dollars per peso.
a. Find the equilibrium exchange rate.
b. Suppose the Philippine central bank wants to fix the exchange rate at 50 pesos per dollar and keep it there. Should the Philippine central bank buy or sell its own currency? How much per month?
Explanation
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(a)The exchange rate of a currency is de...
Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
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