In the overshooting model, an increase in the money supply leads to higher inflation and currency depreciation. Can you think of a situation where higher inflation could lead to currency appreciation?

how does open market operations reduce the rate of inflation

why the other countries cannot use the same primary monetary tool as the US?

Following on from the analysis in the previous questions, an economist comes to the conclusion that the best option for policymakers in order to influence the economy would be to fix the exchange rate, keep control of money supply and allow free movement of capital. Would you agree with such a statement and why?

Consider the gold standard. What happens to the price level if gold discoveries occur?

Does an expectation of a stronger exchange rate in the future affect the exchange rate in the present? If so, how?

Can you think of a way that Chinese monetary policy might impact some other part of the world economy?

Discuss the future of the international monetary system.

What can international business people do to protect their companies from increasing inflation and a weakening dollar?

How a weak currency positively affect the economy?