Description
ECS3703 Assignment 2 Semester 1 Memo | Due April 2025. All questions fully answered. QUESTION 1 [40 MARKS]
Assume that Sub-Saharan African countries are small countries with perfect capital mobility and a desire to maintain a balanced current account and correct unemployment or inflation.
(a)
Explain which macroeconomic policy these countries should use to achieve this under a scenario of a flexible and fixed exchange rate systems and why. ……………………………………………………………….……….………(10)
(b)
With the aid of diagrams, briefly explain how the governments of Sub-Saharan African countries can use the relevant policies mentioned in (a) under each scenario ………………………………………………………………………………(20)
QUESTION 2 [10 MARKS]
Discuss the Optimum Currency Area (OCA)……………………………………………(10)
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