1.

Arranz Candela Esteban - the balance of payments of the Czech Republic

Why does the Czech Republic (and many other emerging and transition economies) have a primary income
balance deficit? Is this typical of emerging economies? If so, why?

The Czech balance of primary income has been in deficit since 1993, which means that income obtained
within the country by non-residents’ production factors have been permanently higher than income obtained
outside the country by residents’ production factors. The difference has increased since 1993, particularly
since Czech Republic entry in the European Union (2005) and, therefore, the balance of primary income
deficit has grown.
Emerging markets often evolve from exporting to developed countries due to the demand for their cheaper
labor and products. Emerging markets often use debt issued by developed market countries. Many of the
emerging market economies in Europe are currently running current account deficits which are quite high relative to
any global or historical standard and are fundamentally unsustainable. Countries like Israel, Poland, South Korea,
Taiwan, the Czech Republic, and city-states such as Singapore have transitioned from emerging to “emerged”. These
emerged markets tend to be characterized by higher incomes and relatively stable political schemes, compared to
those categorized as emerging markets.

2. Hillier Colson Ryan - USD As a Reserve Currency: An Analysis of USD and the History Of Reserve Currencies

What are the main prerequisites (determinants) for a currency to be called a reserve currency? (I.e. what
"characteristics" should the country issuing the reserve currency have.)

 A reserve currency is a currency held by central banks in significant quantities. It is widely used to conduct
international trade and financial transactions, eliminating the costs of settling transactions involving different
currencies.
 Here must be a steady currency supply—by running a current account deficit (US today), or by widely
reinvesting overseas. There must be a large, liquid, low-risk asset market where reserves can be held.

What reserve currencies were used earlier in history? (Just the "name" of the currency and the main reasons why;
no need to give details.) Why, for example, will the Czech koruna (CZK) probably never be considered a reserve
currency?

 The United Kingdom's pound sterling was the primary reserve currency of much of the world in the 19th century
and first half of the 20th century. However, by the middle of the 20th century, the United States dollar had
become the world's dominant reserve currency.
 US Dollar claimed this status from sterling after the devastation of two world wars and the massive spending of
the United Kingdom's gold reserves.
 The Czech koruna has long been the most stable currency in the region, however the Czech Republic's close
trade links with the euro zone could have also been behind the drop.

3. Ouadfel Jeanne - Quantitative easing and other forms of unconventional monetary policy

What are the main differences between quantitative easing and qualitative easing in the context of
unconventional monetary policy?

 This form of monetary policy, known as quantitative easing (QE), was unconventional because it consisted of
large purchases of government bonds of long maturities funded by interest-paying reserves.
 Qualitative easing consists in central bank policies that deteriorate the average quality of the
assets that it holds. This can occur both with and without quantitative easing. By selling high
quality assets (i.e., foreign exchange, government bonds, or gold) to buy low quality assets.

What is forward guidance (in the context of non-convergence monetary policy)?

 Forward guidance refers to the communication from a central bank about the state of the economy and the
likely future course of monetary policy. It is the verbal assurance from a country's central bank to the public
 about its intended monetary policy. The aim of forward guidance is to influence long term interest rates and
market expectations.

4. Tabares de Nava Zárate Martín - Foreign Direct Investment

What are the advantages and disadvantages of foreign direct investment? (A short description is sufficient.)
Advantages: helps to boost the economy of a country; facilitates trades in the global market
allowing an increase in export; builds a competitive share market of global standards.
Disadvantages: can cause interference in domestic investments; sometimes, investments can
result in negative values; can cause modern-day colonial discrepancies leaving companies
defenseless.

What "types" of countries (e.g. in terms of economic development, other characteristics, etc.) are typically the
recipients of foreign direct investment?

Recipients of FDI often gain employee training in the course of operating the new businesses, which contributes to
human capital development in the host country. Profits generated by FDI contribute to corporate tax revenues in the
host country. Largest recipients of FDI: Japan, Netherlands, Canada,United Kingdom.

5. Treiber Felix - The financial crisis economic causes (Deregulations, mortgage-backed securities, subprime
mortgages, real-estate bubble)

Simply explain how the mortgage backed securities system works

1. The mortgagee (lender/small bank) awards a loan to a borrower/someone who wants to buy a house.
2. The lender/small bank packages this loan then together into a ‘pool’ with several other loans/mortgages
3. The mortgagee/small bank sells the mortgage pool to a larger investment bank
[Link] large investment bank mixes the pool of mortgages (also known as Mortgage-backed securities) together with other
securities (Bonds, stocks…) and sells them as so-called Collateralized debt obligations CDOs to the investors with different
risks and different returns
[Link] party (small bank, large bank, investors) will get a share of the profit (generated through the monthly payments of
the loan borrower)

Briefly describe the main events of the 2008 crisis

[Link]
• Legislative changes, which created the legal basis for the securitization of mortgages (for example mortgage-backed
securities)
[Link] of Subprime Mortgages
• Sharp increase in high-risk subprime mortgages and thereby in overall mortgages
• This let the real estate prices rise (this also caused higher Inflation)
[Link] bubble and subprime mortgage crisis
• Large decrease in real estate prices/bubble bursted (Reason: High inflationàhigh interest rates, supply for real estate
went up, demand for real estate went down)
• Investors who bought mortgage-backed securities through CDOs (for example banks like Lehman Brothers) took heavy
losses
[Link]/Banking Crisis
• Unknown number of bad mortgages – no more trust between banks
• No more lendings between banks / shutdown of secondary market (market where these mortgages are traded)
• some banks went bankrupt (mainly because of heavy losses due to securities (mortgage-backed securities) which lost
value)

6. Tsaryk Anastasiia - Migration: why people migrate?

What are push and pull factors in the context of migration? Try to list some push and pull factors.

Push factors:

o These factors force the people to move.

 o These are negative factors associated with the current place or nation in which a person lives.
o Some of the push factors are worsening climate, unstable government and lack of job opportunities.
o Examples of push factors include war, political instability, famine, and drought, among others.

Pull factors:

o These are certain positive factors associated with the new place, that people are moving into.
o Some of the pull factors are better standard of living, educational centres and better job opportunities.
o Examples of pull factors include political stability, lots of jobs, natural resources, better learning institutions,
and better climate.

7. Valls Fernández Gerard – Causes of Financial crisis 2007-2008

What does the term "subprime mortgage" mean in general and simplified terms?

 A subprime mortgage is generally a loan that is meant to be offered to prospective borrowers with impaired
credit records. The higher interest rate is intended to compensate the lender for accepting the greater risk in
lending to such borrowers.
 The idea of the subprime mortgage is to make the purchase of a house available to those with weak credit
rating while the percentage rate is higher than the average mortgage

8. Walker Mackenzie Rae – Uneven Distribution of Wealth and Income in the U.S.

What is the difference between income inequality and wealth inequality? (No need to know any numbers, just
describe the BASIC differences.)

 Wealth relates to differences in people's stock of assets i.e the value of houses or financial assets. Income is a
flow concept; therefore, income inequality relates to differences in people's income flows from wages,
dividends, rents, etc. The two are inter-related.
 Wealth inequality is much more severe than income inequality. Income inequality relates to differences in
people's income flows from wages, dividends, rents

9. Bekaert Baptiste - International Institutions

Try to categorize international institutions focusing on economic development etc. (IMF type etc.). Briefly describe
their main focus.
The World Bank: The World Bank helps developing countries achieve sustainable growth by financing investment,
mobilizing capital in international financial markets, and providing advisory services to businesses and governments.
The IMF: IMF ensures the stability of the international monetary system—the system of exchange rates and
international payments that enables countries and their citizens to transact with each other.
The WTO: It is the only international organization dealing with the global rules of trade. Its main function is to ensure
that trade flows as smoothly, predictably and freely as possible.

10. Bernadski Ilan - The economic consequences of war

What are the economic consequences of the war? How is war usually financed?
Consequences of war:
 Food and crop production are impacted, certain goods quickly become scarce, higher prices, less
exports (supply chain disruptions)
 capital injection from the state causes inflation in the longer term
 Refugee crisis: development of a shadow economy, increased pressure on wages, drain on the host
countries welfare system, law enforcement expenditures, increased housing prices, and higher tax
revenues, the housing market and the pricing of real estate
 Less unemployment: armed forces industries
Ways to finance war:
 Use of debt and taxpayers’ capital (WWII)
 Higher tax brackets (Korean war)
 Government debt, creating a large government deficit (Afghanistan and Iraq Wars)
11. Boiko Filho Andre - the eurozone crisis
What are the causes, course and impact of the euro area debt crisis?
 The European sovereign debt crisis was a period when several European countries
experienced the collapse of financial institutions, high government debt, and rapidly rising
bond yield spreads in government securities.
 This can happen through a tightening of financial conditions such as a spike in interest
rates, a slowdown in trade and economic growth, or merely a steep decline in confidence.
One narrative describing the causes of the crisis begins with the significant increase in
savings available for investment during the 2000–2007 period.
 It had a major political impact on the ruling governments in 10 out of 19 eurozone
countries, contributing to power shifts in Greece, Ireland, France, Italy and others.

12. Brunk Nathan Allen - Uneven distribution of wealth/income: an economic perspective

In economics we encounter so-called flow and stock statistics. What is the difference between them and what
examples can you give? Are there differences between the "flow" and the "stock" view of a given issue?

Stock statistics are measurements of a variable’s value at any given point in time, whereas flow stats are determined
by accumulation over a specified interval. Examples of connected stock and flow statistics are net worth and income,
respectively. Stock perspectives are helpful at providing a snapshot of the issue, whereas flow perspectives allow
understanding of how the issue is changing.

What is the so-called Lorenz curve?

The Lorenz curve displays the cumulative distribution of income or wealth over a population. Taking its integral is
necessary to compute gini coefficients

13. Buettgen Aiden Jordan - Uneven distribution of wealth/income: an economic perspective

What is the Gini coefficient?
Gini Index or Gini Coefficient represents income distribution across a population through a number between 0 and 1.
 0 = perfect equality of income distribution
 1 = perfect inequality.
Therefore, the higher the Gini Index, the greater inequality in a population.

What is causing the growing income/wealth inequality?

 Tech & Employment
 Artificial intelligence is completely removing thousands of jobs.
 Impact: Disproportionately helps highly skilled workers increase their wages, while lower the
low/middle class.
 Climate Change
 Vulnerable populations face extreme weather, impacting ability to work productively.
 Impact: Poorest countries and populations becoming even more poor, increasing income
inequality.
 International Migration
 Migrants often compete for low-skilled job opportunities.
 Impact: This decreases wages for lower class and increases income inequality.

14. Bylyku Nesila - Foreign aid: is it aid or not? Will it help economic growth?
Does foreign aid help economic growth? Is it a "panacea" for underdeveloped economies? Why yes, why no?

Many studies showed that there is no relationship between aid and growth. Negatives effects are:
 Aid has traditionally gone to governments, and helps expand the state sector at the expense of the
private sector in underdeveloped economies)
 Aid dependence can potentially undermine the quality of governance and public sector institutions
by weakening accountability, encouraging rent-seeking and corruption, and easing pressures to
reform inefficient policies and institutions.
  Countries that export more grow more in the long run. Therefore, by receiving a lot of aid incentives
that are against exporting, the ability of the country to grow sustainably in the long run could be
diminished.
Positive effects are:
 Assistance provided to countries’ development includes not only economic and production sector’s
infrastructure, but also social. Social infrastructure in this case includes education, water supply,
vaccination, and sanitation, all with the aim to to long-term sustainable economic growth.
 Aid has helped support democratic transitions both by reinforcing broad development progress and
by supporting civil society organizations, stronger judicial systems, and multiparty elections.

15. Carvalho e Figueiredo Polido Beatriz - Migration: why do people migrate?

What are people's motives for migrating? Try to categorize these motives (e.g. economic, non-economic...).
People may choose to immigrate for a variety of reasons, such as employment opportunities, to escape a
violent conflict, environmental factors, educational purposes, or to reunite with family.

16. Hallová Nikol - Exchange rates regimes

What is an exchange rate regime and what are the basic (i.e. de facto only three main) exchange rate regimes?
What distinguishes these regimes? (Short description.)
Exchange rate regime = a way the government manages its national currency in FOREX
Divided into 3 main groups - hard pegs, soft pegs, floating
Peg (whether hard or soft) refers to a situation where a currency is set at a fixed rate against another currency (soft
peg has also a margin within which the exchange rate can fluctuate) whereas floating is a regime where the
exchange rate is determined by supply and demand (there is no pegged currency). They also differ in the degree of
flexibility and stability
Briefly list the main advantages and disadvantages of the main exchange rate regimes.
 Hard pegs - pros: provide stability (low-inflation economy);
cons: country cannot control the exchange rate and money supply - no autonomous monetary
policy (no flexibility),
 Soft pegs - pros: provide stability as well; because of the margin there is a little space for autonomous
monetary policy; cons: frequent interventions will cause a shortage of foreign reserves,
 Floating - pros: provide high flexibility (the central bank can adjust its interest rates); cons: no stability, the
exchange rate is not stable.

17. Hotzel James Albert - Theories of International Trade and Their Relevance Today

Briefly describe at least two or three theories of international trade. You may also give some suitable examples.
1) Mercantilism - a theory designed in the 1600s to maximize exports and minimize imports. It promotes
imperialism, colonialism, and the use of tariffs and subsidies on your own goods. Great Britain in the 1700s used
mercantilism and created laws to restrict foreign ships' trade. The empire also used its navy to create colonies and
enslave indigenous people to promote trade within the country
2) Absolute Advantage- Absolute advantage is the ability of one party to create a good more efficiently than another
party. Absolute advantage allows you to identify the strengths of your economy. An example of an absolute
advantage is Saudi Arabia’s oil supplies. This country uses its absolute advantage in oil to discourage competitors.
3) Product Life Cycle- This theory matches the pattern of international trade over a product's life cycle. The four
phases are introduction, growth, maturity, and decline. An example would be the life cycle of the first iPhone. You
can track its introduction in California. Then see its growth across the United States and the world. After you see its
maturity where its sales slow and fewer and fewer markets are introduced to it. Finally, there is a decline where the
phone is phased out and replaced by a new iPhone or a competitor has made a newer better version.

18. Hug Andrea - Balance of payments analysis of Switzerland

Briefly describe the balance of payments - whether of Switzerland, the Czech Republic or your home country (it
doesn't matter, the choice of country is not important). The important thing is to capture the main trends in the
balance of payments of your chosen country.
o The balance of payments summarizes the economic transactions of an economy with the rest of the world.
These transactions include exports and imports of goods, services, and financial assets, along with transfer
payments
o The balance of payments in Switzerland comprises the current account, the capital account and the financial
account, and records transactions between residents and non-residents during a given period. The international
investment position reports the cross-border stocks of financial assets of all institutional units as at a specific
reference date at the end of a period.

19. Chanteloube Maxime - Causes and reasons for the current high rate of inflation
What are the main reasons for the current high inflation rate?
The current high inflation rate can be attributed to different factors, many of which are a result of the Covid-19
pandemic. At the start of the pandemic, consumers began spending less because of lockdowns, and in turn, started
saving more. Then, when Covid-19 restrictions eased, people started spending more again. Companies, however,
couldn’t keep up with this increased consumer demand — many of them had reduced production because of the
pandemic and experienced shipping delays as well as shortages in labor and key inputs. Higher prices for most goods
and [Link] price increases were seen across multiple categories in June, some of the largest price hikes
occurred

20. Jousset Kim - Is GDP a suitable indicator for economic development in an open economy?

Briefly describe the advantages and disadvantages of using GDP as the main economic indicator.

 Advantages: sum of the added values which avoids double counting - can be used over time - counters the issue
of heterogeneity of goods and services by making national data easier to compare - allows international
comparisons.
 Disadvantages: problem concerning the measurement and expression of the GDP in value or in volume which
requires the use of the GDP deflator - comparison in volume takes little account of the improvement in product
quality. Different current prices of a product from one country to another - ignores the informal production of
households (self-consumption) - does not take into account the activities of the underground economy -
problem of the accuracy of the exchange rates and their large variation, which does not guarantee a stability.

What are alternative indicators of economic development? (Just give examples.) Choose one "alternative"
indicator and briefly describe it.

 HDI - Inequality adjusted Human Development Index - Gender Inequality Index (GII) - GINI coefficient
and Lorenz curve - Kuznets Curve
 Multidimensional Poverty Index (MPI) is a composite index that tracks deprivation across three
dimensions and 10 indicators. The most important ones remain standards of living (access to
electricity and water, ability to have access to toilets, to cook decently…), education (are kids
enrolled in schools, if so for how many years…) and health (child mortality and nutrition).

21. Kane Sean - Impacts of COVID-19 on economic development (labour market, fiscal policy...)

What are the economic impacts of the COVID-19 pandemic? You can describe the impact on Ireland, but also on
your home country or the Czech Republic, etc. - it's up to you. Focus mainly on developments in public finances,
the labour market and international trade.

 The COVID-19 pandemic sent shock waves through the world economy and triggered the largest global
economic crisis in more than a century. The crisis led to a dramatic increase in inequality within and across
countries.
 Unfortunately, COVID–19 further harmed its economy beyond just falling oil prices. During the special
quarantine periods, many people lost their jobs and businesses had to close. This amounts to a 40% increase
during that short period of time.
 The spread of COVID–19 in Azerbaijan has had a negative impact on both the livelihoods of citizens and the
economy of Azerbaijan. Although the government of Azerbaijan has taken serious measures to stop the spread
 of COVID–19 in the country, cases are still relatively high. Inhabitants of Azerbaijan who were already facing the
economic fallout resulting from drops in oil prices and other factors now face a decreasing GDP per capita and
increasing unemployment rates.

22. Lee Sangjin - International Trade and Economic Growth about South Korea

How can economies develop? How can economic development happen? What are the factors that help and hurt
economic development? You can choose any economy (i.e. not just South Korea)

 Economic development and growth are influenced by four factors: human resources, physical capital, natural
resources, and technology. Highly developed countries have governments that focus on these areas. Less-
developed countries, even those with high amounts of natural resources, will lag when they fail to promote
research in technology and improve the skills and education of their workers.
 Faster growth in gross domestic product (GDP) expands the overall size of the economy and strengthens fiscal
conditions.
 Economic growth is driven oftentimes by consumer spending and business investment. Tax cuts are used to
return money to consumers and boost spending. Deregulation relaxes the rules imposed on businesses and have
been credited with creating growth but can lead to excessive risk-taking.

23. Lindblom Oskari Joonatan - Impacts of covid-19 on economic development in EU and Finland

What was the fiscal policy response in the EU and in your chosen country (not necessarily Finland) to the
coronavirus pandemic? How have the fiscal policy actions affected the government's balance and debt?

 Member States have provided an unprecedentedly large amount of fiscal support to their economies during the
coronavirus crisis.
 The EU and its member states are working together to reinforce national healthcare systems and contain the
spread of the virus. At the same time, the EU and its member countries are taking action to mitigate the socio-
economic impact of COVID-19 and support the recovery.

The covid-19 pandemic has been linked to the economic crisis. The economic crisis is associated with an increase
in the unemployment rate. Unemployment rates have risen in EU countries since covid cirsis, but not as
significantly as, for example, after the 2008 crisis. Why is this so? What are the reasons behind this?

 Because a recession is a slowdown in economic activity and labor is a key economic input, along with capital, it is
logical that unemployment would rise as output (what companies make and sell) declines as companies making
less and selling less need fewer employees.
 Unemployment has been rising sharply in the European Union (EU) since March 2008 as a result of the global
economic crisis. The increase is felt in every Member State, although the severity varies widely between
countries and groups. Men are clearly affected more than women.
 The unemployment rate is an important indicator with both social and economic dimensions. From an economic
perspective, unemployment indicates unused available labor. Rising unemployment may also result in loss of
income for individuals and increased pressure on government spending on social benefits.

24. Menino Madeira Ana Carolina - Why are real estate prices so high?

What are the economic and non-economic reasons for rising property prices? Use both demand-side and supply-
side factors. Just general information. There is no need to give any data, the situation in certain countries, etc.

The prices of homes, like those of stocks and bonds, depend heavily on the law of supply and demand. More
demand, prices tend to rise; more supply, they tend to fall.

The housing market, too, relies heavily on supply and demand, which is why it is a much looked-at indicator in the
industry. Each housing transaction, of course, involves a buyer and a seller. The buyer places an offer to buy a
property, leaving the seller to accept or reject the offer.
The law of supply and demand dictates the equilibrium price of a property. A low supply or housing inventory may
drive prices up, which is what tends to result in bidding wars. A specific property may be in demand by multiple
parties who all try to outbid each other by increasing their purchase price offer.

25. Mirzayeva Sabina - The Global Financial Crisis of 2008

a. What caused the price surge in the US real estate market (the so-called housing bubble) after the new
millennium until the outbreak of the so-called global financial crisis?
A housing bubble a sustained but temporary condition of over-valued prices and rampant speculation in housing
markets. The U.S. experienced a major housing bubble in the 2000s caused by inflows of money into housing
markets, loose lending conditions, and government policy to promote home-ownership. low-interest rates,
wider mortgage product offerings, and easy access to credit. Forces that make a housing bubble pop include a
downturn in the economy, a rise in interest rates, and a drop in demand.
b. Briefly describe what happened in the "turbulent period" around the collapse of Lehman Brothers in
September 2008. It is not necessary to focus only on Lehman Brothers or 2008, but it is useful to focus on the
panic in the markets around 2008.

26. Ouaknine Benjamin - Impacts of globalization and COVID-19 on economic development (labor market, fiscal
policy)

The COVID-19 pandemic, due to restrictions on the movement of people and goods within the domestic economy
and internationally, has clearly highlighted certain negative aspects of globalization. What are they?

 The ongoing COVID-19 pandemic has highlighted the vast differences in approaches to the control and
containment of coronavirus across the world and has demonstrated the varied success of such approaches in
minimizing the transmission of coronavirus.
 The pandemic has caused the largest and fastest decline in international flows — including trade, foreign direct
investment, and international travel — in modern history. While these numbers imply a major rollback of
globalization’s recent gains, they don’t necessarily signal a fundamental collapse of international market
integration.

27. Santa Cruz Rodríguez Antonia - International trade theories and their relationship with economic growth
Briefly describe the theories of absolute and relative advantages.
 Absolute advantage is the ability of an entity to produce a product or service at a lower absolute cost per unit
using a smaller number of inputs or a more efficient process than another entity producing the same good or
service.
 A product's degree of superiority and attractiveness to customers over similar existing products. A relative
advantage is commonly achieved by offering consumers greater value, either by lowering prices or by supplying
improved benefits and service that quantifies higher prices.

How can international trade be viewed in terms of economic growth? Does trade help growth or vice versa?
Considering the theory, trade does benefit economic growth, since it allows countries to be more efficient in their
use of resources, so that countries expand their possibilities and have greater growth.
 Countries that are open to international trade tend to grow faster, innovate, improve productivity, and provide
higher income and more opportunities to their people. Open trade also benefits lower-income households by
offering consumers more affordable goods and services.
 International trade allows countries to expand their markets and access goods and services that otherwise may
not have been available domestically. As a result of international trade, the market is more competitive.

28. Signorelli Rocco - World trade in iron ore

What is the so-called Dutch disease? (It is not necessary to focus on iron ore, just a general description and
mechanism.)
  Dutch disease is a shorthand way of describing the paradox which occurs when good news, such as the
discovery of large oil reserves, harms a country's broader economy. It may begin with a large influx of foreign
cash to exploit a newfound resource.
 Dutch disease is a concept that describes an economic phenomenon where the rapid development of one
sector of the economy precipitates a decline in other sectors.

29. Sychra Arnošt, Bc. - Exchange rate regimes (their advantages and disadvantages)
(Don't memorize the diagrams that are in the presentation.)

Describe the pros and cons of the three basic exchange rate regimes.

 Hard pegs - pros: provide stability (low-inflation economy);

cons: country cannot control the exchange rate and money supply - no autonomous monetary
policy (no flexibility),
 Soft pegs - pros: provide stability as well; because of the margin there is a little space for autonomous
monetary policy; cons: frequent interventions will cause a shortage of foreign reserves,
 Floating - pros: provide high flexibility (the central bank can adjust its interest rates); cons: no stability, the
exchange rate is not stable.

Write what country you are from. What exchange rate regime does your country use? Why do you think your
home country uses your chosen exchange rate regime? Is it advantageous/disadvantageous for your country to
have this particular exchange rate regime?

 In Azerbaijan, by contrast, the authorities appear determined to avoid any adjustment to the exchange rate.
Azerbaijan’s public finances have deteriorated but will remain manageable in the near term. A crisis-response
program to address the adverse effects of the Covid-19 pandemic and low oil prices moved the fiscal account
into a deficit of -6.5% of GDP in in 2020.
 Floating exchange rates make it possible to establish the actual value of the national currency,
depending on the development level of the economy and, therefore, provide protection for the national
economy from external shocks and automatically correct it internally.
 Unconditionally floating exchange rates also can negatively influence the national economy and entail
costs for the economy by deterring investment and international [Link] are also unpredictable and
unstable, but at the same time, their significant fluctuations in the exchange rate have little effect on the
state and economic development .