Topic
Quantitative Easing
Instructions
Read the Making the Connection short case titled The Debate over Quantitative
Easing? in Chapter 28 of our textbook, and also be sure to watch the video right
under the Making the Connection title (maybe a few times). Then post your first
posting this week beginning to discuss what you’ve read and watched in the video.
• Then work on Problems and Applications 4.10, at the end of Chapter 28, answering
and discussing the questions in that exercise.
Answer Preview
The Nigerian currency, Naira was introduced in the country in 1973 following the dropping of the pound which had been used for many years. The currency has had different values in the international forex market and the government has been controlling this value which saw the Naira being pegged at 197 to the dollar. The government adopted a different forex regime and floated the currency. This would allow the currency to trade at fluctuating values based on the demand and supply of money in the market. This approach is considered better as the economists had predicted the value of the naira to continue declining under the regime which the central bank was using. Floating the currency would allow it to trade more competitively in the global market.
Word Count: 350