This video is underrated. :) Can you please expand on your comment at 01:21:38 "which is an expansionary policy" whilst the slide reads ""reversing the expansionary policy"?
He made a mistake! When the government buys its own currency to prevent depreciation of its currency it leads to a contractionary policy. Here is why: Government buys its own currency -> reduces the supply of its currency -> strenghens its currency value Consequences: exports are more expensive for foreign buyers, leading to a reduce in exports and consequently in economic activity
This video is underrated. :)
Can you please expand on your comment at 01:21:38 "which is an expansionary policy" whilst the slide reads ""reversing the expansionary policy"?
He made a mistake! When the government buys its own currency to prevent depreciation of its currency it leads to a contractionary policy.
Here is why:
Government buys its own currency -> reduces the supply of its currency -> strenghens its currency value
Consequences: exports are more expensive for foreign buyers, leading to a reduce in exports and consequently in economic activity
Extremely helpful! Thank you!
Excellent
"You didnt have to worry about inflation. " I am from argentina 😅