e. The exchange rate of the Dirham, the currency used in Morocco, is generally determined by demand and supply. However, if the currency price goes below a set lower limit (minimum) or above a set upper limit (maximum) compared to the US dollar, then Morocco's central bank will adjust the Dirham exchange rate by buying or selling the Dirham against other currencies. What kind of exchange rate system is being used by Morocco and why do you think so? Explain 2 advantages of using this type of exchange rate system. On the 4th of July 2022, the exchange rate from the US dollar to Dirham was $1 to DH 10.01. On the 1st of September 2022, the exchange rate had changed to $1 to DH 10.57. Explain and justify if the Dirham appreciated or depreciated in value against the US dollar between July and September 2022.
e. The exchange rate of the Dirham, the currency used in Morocco, is generally determined by demand and supply. However, if the currency price goes below a set lower limit (minimum) or above a set upper limit (maximum) compared to the US dollar, then Morocco's central bank will adjust the Dirham exchange rate by buying or selling the Dirham against other currencies. What kind of exchange rate system is being used by Morocco and why do you think so? Explain 2 advantages of using this type of exchange rate system. On the 4th of July 2022, the exchange rate from the US dollar to Dirham was $1 to DH 10.01. On the 1st of September 2022, the exchange rate had changed to $1 to DH 10.57. Explain and justify if the Dirham appreciated or depreciated in value against the US dollar between July and September 2022.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
Section: Chapter Questions
Problem 30CTQ: Many developing countries, like Mexico, have moderate to high rates of inflation. At the same time,...
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