One of the goals of a Federated Government is to stimulate the economy. This may be achieved through distinct steps. Using graphs, where required, explain those steps.
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International Economics
Criteria
Introduction where they highlighted the concept of QE and discussed the impact QE has on international economies with reference to the case of U.S. and China.
(10 Marks)
Relate the impact of QA on the countries reserves of foreign currencies and the value of these reserves in the context of FOREX market model
(10 Marks)
Cover all the concepts of each question, and provided a detailed explanation of foreign exchange rate, fiscal and monetary policies and economic stability in a country’s economy
(10 Marks)
Overall organization, appearance of answers, and the use of graphs in support of answers
(10 Marks)
Assessment 2:
In mentioned cases provide a neat diagram to explain your answer and make sure to label axes properly.
1. Give an introduction to the question and explain all key terms
2. Give a graft, label the axes properly and identify all the curves
3. Give a brief description of the changes and outcomes as indicated by the graft.
Question No. 1
• Quantitative Easing (QE) is a monetary policy in which a central bank purchases or other securities from the market to decrease interest rates and increase the supply of money. Quantitative easing increases the quantity of money in the economy by flooding commercial with capital in an attempt to increase lending and liquidity.
• The following information is from International Business Times (April 4, 2012)
“China has reacted to U.S. QE in the past by expressing dismay, primarily given the overweight U.S. dollar position in their foreign currency reserves.”
(Source:http://www.ibtimes.com/exnet/chinese-reaction-fed-qe3-not-happy-797141 )
• Explain the dismay of Chinese government due to quantitative easing (QE) using the FOREX market model discussed in the class. Make sure that you consider the undervalued exchange rate of China while answering the question. Provide neat diagram(s) to explain your answer.
Question No. 2
One of the goals of a Federated Government is to stimulate the economy. This may be achieved through distinct steps. Using graphs, where required, explain those steps.
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