International monetary Essay Example | Topics and Well Written Essays - 1500 words

International monetary - Essay Example There is a relationship between real exchange rate and balance of payment crisis. The exchange rate is one of the variables for the BOP crisis (Berg & International Monetary Fund, 1999). The government handles the BOP crises situations by taking up various measures. This paper will discuss the degree of relationship between the measures. The crisis situation in a country’s BOP occurs when it moves beyond the control of the government to remove the current account’s deficit. The crisis situation would lead to deficit in foreign exchange reserves too. Considering these adverse impacts of the BOP crisis, the objective of this paper has been selected that will comprehensively discuss the measures taken up by the government for dealing with the adverse conditions. Nature of the Exchange Rate The exchange rate acts just as the demand and supply of currency in an international market that in turn affects the BOP. There will be minimum effect when a currency of a domestic count ry’s demand and supply is equivalent. This is represented below in figure1 (Pereira, 1998). Figure 1: Interaction of demand and supply with respect to foreign currency and unit prices (Pereira, 1998). The demanded and supplied foreign currencies are exhibited in X-axis, in a specific period. The unitary prices / exchange rates are illustrated in Y-axis for the foreign currencies that are in national currency. At point 4, the demand and supply meet and the exchange rate is maintained. There is less volatility in the exchange rate and it does not develop BOP crisis (Pereira, 1998). If it is now considered that the demand is constant and the supply of the currency has declined, then the rate of exchange declines and there are difficulties in the BOP management. This might lead to BOP crisis if it lasts for long period of time. This is illustrated below in figure 2 (Pereira, 1998). Figure 2: Interaction of demand and supply with respect to foreign currency and unit prices with sh ift in supply curve (Pereira, 1998). The supply has been declined when the demand became constant. The curve SS moves to S†S†. Thus, the exchange rate declines from point 4 to 3. The effect is viewed in the BOP where there are chances of deficits and crisis might be present. The demand and supply of the currency determines the exchange rate fluctuation and its effects are seen in the BOP. The BOP crises are generated with continuous decline in the exchange rate of the domestic country (Pereira, 1998). There are three alternative assumptions of BOP that are discussed here. These theories are known as ‘absorption’, ‘elasticity’ and ‘monetary approaches’ (Ardalan, 2003). Elasticity Approach In this approach the impact of devaluation of the exchange rate on domestic output is believed to be met by distinction in output and employment rather than prices, with the consequences of variations in the level of output is viewed on the balance of payments. The association connecting the balance of payments and supply of money, and linking the supply of money and the cumulative demand are ignored. This is through the assumption of existence of unemployed resources and Keynesian scepticism concerning the influence of money (Ardalan, 2003). According to the Mundell-Fleming Model of elasticity approach to the BOP, there are two effects: (1) The exchange rate outcome contributes to a

Congressional Leadership Essay Example | Topics and Well Written Essays - 1250 words

Congressional Leadership - Essay Example For a person to be a senator, he must have attained the mature age which is thirty years, must have been a citizen in the United States for nine years and that when elected, shall not be a citizen of the State where that person shall be selected. This paper will talk about various leaders of the 112th Congress in the U.S., their parties, the state they represent, and their roles in the Congress. It will also show the ranks of various leaders in the senate and the United States House of Representatives. The United States Senate and House of representatives has several members each of which is elected according to the law and has his or her own duty to perform in service of the people. Discussion The head of the senate is the United States Vice President and shall have no vote unless there is an equal division (James 36). The senate chose the other officers including a head pro tempore, when the vice leader is absent, or when exercising the Office of the President of the United States. The sole power of the Senate is to try all the prosecutions. During this sitting, they should be on pledge or affirmation, and when there is a trial on the United States President, the presiding officer is the Chief Justice. Nobody is to be convicted with no agreement of at least two thirds of present members (Katie 15).The legislature of the United States is more prevailing than in the other countries. ... Being a senator for 36 years from Delaware, Biden became famous as a leader through the nation’s most significant domestic and worldwide challenges (Joseph 40).  His political party identification is the Democratic Party in the administration of the president of the United States and he is elected in the office as an official in the white house. His constitutional duties include being the president of the senate although he votes only when there is a tie. The president of the senate is the presidential successor whereby he heads the administrative office in the case where the president is not in office due to illness, death or due to resignation. This may be for a short while, or it may be permanent. During elections, the vice president, who is the president of the senate has the duty of accepting tallies of ballots that are cast for the president and the deputy president that are from every state whereby eventually there is an official count when the Senate and the House of Council are present (Joseph 45). President pro tempore of the senate is Senator Daniel Inouye who represents Hawaii has been in office since the death of Senator Robert Byrd. He is constitutionally accepted as an official in the legislature who leads the chamber when the vice president is absent. The senate elects him and by tradition, he is the senator in the party that has the best record of a constant service (Katie 25). He is of the Democratic Party. In order for one to become the president pro tempore, he must be involved in the political party. Working in the United States Council campaigns voluntarily, and networking with the party officers and candidates. The person should go to a school of law in order to expand the skills in public speaking