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Exchange Rate Depreciation and Preventing a Recession


Discuss whether or not an exchange rate depreciation will prevent an economy from experiencing a recession.


Macroeconomic Factors and Policies

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I. 🍃Introduction
- Explanation of the topic
- Brief overview of the points to be discussed

II. Reasons why depreciation might lead to economic growth
- Explanation of how depreciation makes exports cheaper and imports more expensive
- Increase in export demand and decrease in import demand
- Increase in output to meet the demand
- Prevention of recession
- Increase in aggregate demand

III. Reasons why depreciation might not lead to economic growth
- Explanation of inelastic demand for imports and exports
- Possibility of a recession in main export markets
- Cost-push inflation due to increased cost of imported inputs
- Reduction in investor confidence leading to a recession

IV. 👉Conclusion
- Summary of the points discussed
- Final thoughts on the topic

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