country: INDIA

• Is the trade balance sensitive to changes in foreign prices for imports and exports
• Estimate which quadrant of the SWAN diagram your country of choice may be operating in? (Note you are not expected to identify the relative elasticities of IB and EB schedules)
• What might that predict about the role for policymakers - what should be the policy focus - internal and external balance
• what drives the RER - is it changes in the price of Non tradeables or the nominal exchange rate