A small economy country whose GDP is heavily dependent on trade with the United States could use pegged exchange rate with the United States.
What is Microeconomics?
- The social science of microeconomics examines the effects of incentives and choices, particularly how they affect the allocation and use of resources.
- Microeconomics explains how and why different things have varying values, how people behave and profit from efficient production and trading, and how people may work together and coordinate best. In general, microeconomics offers a fuller and more thorough understanding than macroeconomics.
- It is the study of what is probably going to occur (tendencies) when people make decisions in reaction to changes in rewards, pricing, resources, and/or production processes.
- Microeconomic subgroups for individual actors, like customers, sellers, and business owners, are frequently formed.
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