DSE 2017 Answer Key

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DSE 2017 Answer Key

Amit Goyal
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Re: DSE 2017 Answer Key

Statistician
Can anyone post DSE answer key? I am trying but du website server has some problem right now.
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Re: DSE 2017 Answer Key

economics17
In reply to this post by Amit Goyal
Sir, could you explain why the answer of Q50 is a)? Mankiw has explicitly mentioned that fiscal expansion under fixed exchange rates has no impact on the trade balance.
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Re: DSE 2017 Answer Key

ElPsyCongroo
It has no impact on the balance of payments, trade balance itself is just imports vs. exports.

You agree income increases with a fiscal expansion right? If income increases imports must increase, exports are simply a function of real exchange rate, so they remain unchanged.

So trade balance must deteriorate.

That's what I thought atleast, actually option d in this question pushed me to mark that as the answer, what actually happens is just the opposite of what they have described in that option (there would be an increase in import without affecting exports).
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Re: DSE 2017 Answer Key

economics17
Okay, get it
Thanks Man!
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