Problem
1. If the foreign demand for a nation's major export commodities is highly inelastic, will flexible exchange rates equalize the value of a nation's exports and the value of its imports? Why or why not?
2. "A system of flexible exchange rates is advantageous because it enables a nation to stabilize domestic employment and prices without regard to the foreign sector." True, false, or uncertain? Explain.
3. Discuss the role of time in balance-of-payments adjustments. Why will short- and long-run effects of a depreciation probably differ?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.