Question
Suppose that India decides to peg the rupee (INR) to the U.S. dollar in hopes of increasing exports. If the exchange rate is currently USD/INR
Suppose that India decides to peg the rupee (INR) to the U.S. dollar in hopes of increasing exports. If the exchange rate is currently USD/INR = 65, would a peg of USD/INR = 75 or 55 be better for India to achieve its objective? Explain what the Indian government needs to do in the foreign exchange market to achieve and maintain this peg. How would this affect India's foreign reserves?
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A Textbook Of Mathematical Economics
Authors: Dr Chandrakant Singh
1st Edition
9353140986, 9789353140984
