a) Based on appendix 1, compare the development in living standards in Sweden and Denmark. Include relevant calculations.
b. The 1st of July 2008 the exchange rate of Swedish kronor (SEK) was 79.8 DKK, and the 1st of July 2018 the exchange rate of Swedish kronor (SEK) was 71.3 DKK. Explain how the change in the exchange rate of Swedish kronor has influenced living standards in Sweden.
a) Based on appendix 2, explain how the decreasing interest rate in Sweden has influenced demand for and supply of Swedish kronor, and also impacted the exchange rate of Swedish kronor.
b. Based on appendix 2 and appendix 3 explain how the development in the exchange rate and the unit labor costs has influenced Swedish competitiveness relative to Denmark.
In the introduction to appendix 6 it says: “Denmark and Sweden have gone their separate ways monetary policy wise. This has benefitted Sweden in the short-term, but it is uncertain whether it is beneficial in the long-term.” Based on the appendices, assess possible reasons for introducing contractionary monetary policy in Sweden.
GDP should increase by 1.5-2 every year for us to say that a country is growing but not overheating. On average it has increased by almost 2% every year.
The danish GDP has also increased. It has increased from DKK 1869.40 billion is 2008 to DKK 2038.19 billion in 2018.
To determine the index number, I calculate the same way as previous, and my result is 109.03.
So, the Danish economy has increased by 9.03 % over the last 10 years. That is a little bit under what we could hope, but it isn’t we need to make any big changes about it.