You work in the Economic Planning Department of a consultants, Econ Consult. You have been asked by the Managing Director to work in a small group with 3 other people to write a response to the following enquiry.

Company Name : We need to know
Contact Name : Dr J Jack
Company Address : Room 101, 77 Old Road, Bath, NW29

Can you help me, if our exports are £15million, and our imports are £23.5 million, given the PED of exports is 0.8 and the PED of imports is 1.2, by how much would the exchange rate need to depreciate to cause a trade balance surplus ? Also what are the likely consequences of this depreciation in the long run ?

Your findings need to be presented in two ways, the first will be as a written report with covering letter, second will be as a question and answer session on the content of the report.

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