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ECS3703 ASSIGNMENT 2 SEMESTER 2 – 2023 (753306)
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ECS3703 ASSIGNMENT 2 SEMESTER 2 – 2023 (753306)
CLOSING DATE: 07 SEPTEMBER 2023
Question 1 [25]
Suppose the Sub-Saharan African region intends to adopt a common currency for its
member countries as it would be economically beneficial for the participants (nations).
(a) What is this arrangement called……………………….…………………… (2)
(b) In your view, would the Sub-Saharan African region have any chance of
benefiting from this kind of arrangement, and why?……………………………(10)
(c) Discuss the risks and benefits associated with the adoption of a common
currency…
Question 2 [25]
Nation A is a small nation that operates under the principle of free movement of capital
and fixed exchange rates. The country desires to reach the full-employment level of
national income with equilibrium in its balance of payments.
(a) Which relevant macroeconomic policy would you advise nation A to use to
achieve this and why?……………………………………………………………………… (5)
(b) With the aid of a graph, explain how the nation should use the relevant policy
mentioned in (a) to achieve the full-employment level of national income with
equilibrium in its balance of payments
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