Q1. An electrical utility is experiencing a sharp power demand, which continues to grow at a high rate in a certain local area. Two alternatives to address this situation are under consideration. Each alternative is designed to provide enough capacity during the next 25 years. Both alternatives will consume the same amounts of fuel, so fuel cost is not considered in the analysis. The alternatives are detailed as follows:
Q2. Which system would be accompanied by occasional currency interventions by central banks to stabilize or alter rates to avoid persistent balance of payments deficits or surpluses?