Question
Coffee is one of Honduras' main exports. Assume that coffee prices fall because of a drop in world demand. a. Assume that Honduras fixes the
Coffee is one of Honduras' main exports. Assume that coffee prices fall because of a drop in world demand.
a. Assume that Honduras fixes the value of its currency, the lempira, to the dollar. Provide one method that Honduras could use to fix the value of its currency when coffee prices fall.
b. Will the fall in coffee prices decrease Honduran GDP more if Honduras has fixed exchange rates or flexible exchange rates? Why?
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Macroeconomics
Authors: David C. Colander
10th edition
1259663043, 1259663048, 978-1259663048
