Homework Answers
1. Since RMB depreciated on the USD, this means USD became more expensive. This implies imports to become costlier. Hence Imports will decline.
2. Now because RMB has depreciated this means, for foreigners, chinese products have become cheaper. So, foreigners (having USD) will purchase more from China. Hence exports of china will increase.
3. Trade balance = exports - imports.
Since exports have increased, imports have declined. Therefore Trade balance will increase.
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4. China fixes the exchange rate of RMB is fixed in terms of USD. Examine the...
Macroland is a small open economy with perfect capital mobility and a fixed-exchange-rate system. Macroland is...
Macroland is a small open economy with perfect capital mobility and a fixed-exchange-rate system. Macroland is initially in the long-run equilibrium at the natural level of output with balanced trade. With the help of an appropriate diagram, compare the impact of a tax cut in the short run (when prices are fixed) and in the long run (when prices are flexible) on: 1. Output, 2. Consumption, 3. Investment, 4. Net exports 5. Exchange rate.
answer these 4 . will rate after A reduction in the British interest rate relative to...
answer these 4 . will rate after
A reduction in the British interest rate relative to the U.S. interest rate will cause a(n): appreciation of the dollar and an appreciation of the British pound. O appreciation of the dollar and a depreciation of the British pound. depreciation of the dollar and an appreciation of the British pound. O depreciation of the dollar and a depreciation of the British pound. A decrease in preference for Japanese automobiles, all else the same,...
Consider the following open economy. The real exchange rate is fixed and equal to one. Consumption, investment, governm...
Consider the following open economy. The real exchange rate is fixed and equal to one. Consumption, investment, government spending and taxes are given by: C = co + ci(Y-T), I = 7, G=G, and T=1 Imports and exports are given by: Q = my and X = rY* where asterisk denotes a foreign variable. a) Solve for equilibrium income in the domestic economy, given Y*. What is the multiplier in this economy? If we were to close the economy (so...
V. Consider an open economy in which the real exchange rate is fixed and equal to...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by С 10 + 0.8(Y-T), l 10, G-, 10, and T-10 Imports and exports are given by IM 0.3Y and X 0.3Y where Y" denotes foreign output. ECON 10SB Solve for equilibrium output in the domestic economy, given Y. What is the multiplier in this economy? If we were to close the economy-so exports and...
V. Consider an open economy in which the real exchange rate is fixed and equal to...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by C= 10 + 0.8(Y-T), l = 10, G = 10, and T= 10 Imports and exports are given by where Y" denotes foreign output. ECON 105B a. Solve for equilibrium output in the domestic economy, given Y". What is the multiplier in this economy? If we were to close the economy-so exports and imports...
2. Match the following terms with their definitions Answers Misperceptions Theory Exchange-rate effect Interest-rate effect Sticky-Wage Theory Full-employment output Options The production of goo...
2. Match the following terms with their definitions Answers Misperceptions Theory Exchange-rate effect Interest-rate effect Sticky-Wage Theory Full-employment output Options The production of goods and services that an economy achieves in the long run when unemployment is at its normal rate a. b. The short-run aggregate supply curve slopes upward because nominal wages are slow to adjust to changing economic conditions. When a fall in the U.S. price level causes U.S. interest rates to fall, the real value of the...
QUESTION 9. In recent years, it has been suggested that both China and the US have...
QUESTION 9. In recent years, it has been suggested that both China and the US have engaged in currency manipulation or ‘competitive devaluations’. All else the same, from this we can conclude: A. Chinese goods will be less expensive in US markets in the short-run, but US goods will be more expensive in China. B. US goods will be less expensive in China in the short-run, but Chinese goods will be more expensive in the US. C. Chinese and US made goods...
We have prepared an article about the general economic situation of India. Now, as a second...
We have prepared an article about the general economic
situation of India. Now, as a second assignment, our teacher asks
for a general comment and a question that has not been asked before
and the answer to that question. It is very important not to be
short. We should comment according to the information in the photo.
We have to ask a question and answer that question again with a
comment. a very urgent job.
1-Export Performance In recent years....
12) In the IS-LM Model, assuming a downward slop Model, assuming a downward sloping IS curve...
12) In the IS-LM Model, assuming a downward slop Model, assuming a downward sloping IS curve and an upward sloping LM curve; an increase in consumer wealth is going to A) cause a rightward shift of the IS curve. B) cause a rightward shift of the LM curve. C) cause a movement along the IS curve. D) cause a leftward shift of the LM curve. 13) The biggest difference between the 2008-09 recession and its aftermath, as compared to the...
B3. Open Economy IS-LM-FE model: The behaviour of households and firms in an open economy is...
B3. Open Economy IS-LM-FE model: The behaviour of households and firms in an open economy is represented by the following equations: Full-employment outputY-1200 red consumption Cd = 350 + 0.5Y-200r : Desired investmentd 250-300r Government purchasesG 95 Net exports : NX = 100-01-05e Real exchange rate : 90. Assume that the real interest rate, r, does not deviate from the foreign interest rate and that the economy is initially in general equilibrium. ve the open-economy IS curve writing the real...
answer these 4 . will rate after
A reduction in the British interest rate relative to the U.S. interest rate will cause a(n): appreciation of the dollar and an appreciation of the British pound. O appreciation of the dollar and a depreciation of the British pound. depreciation of the dollar and an appreciation of the British pound. O depreciation of the dollar and a depreciation of the British pound. A decrease in preference for Japanese automobiles, all else the same,...
Consider the following open economy. The real exchange rate is fixed and equal to one. Consumption, investment, government spending and taxes are given by: C = co + ci(Y-T), I = 7, G=G, and T=1 Imports and exports are given by: Q = my and X = rY* where asterisk denotes a foreign variable. a) Solve for equilibrium income in the domestic economy, given Y*. What is the multiplier in this economy? If we were to close the economy (so...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by С 10 + 0.8(Y-T), l 10, G-, 10, and T-10 Imports and exports are given by IM 0.3Y and X 0.3Y where Y" denotes foreign output. ECON 10SB Solve for equilibrium output in the domestic economy, given Y. What is the multiplier in this economy? If we were to close the economy-so exports and...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by C= 10 + 0.8(Y-T), l = 10, G = 10, and T= 10 Imports and exports are given by where Y" denotes foreign output. ECON 105B a. Solve for equilibrium output in the domestic economy, given Y". What is the multiplier in this economy? If we were to close the economy-so exports and imports...
2. Match the following terms with their definitions Answers Misperceptions Theory Exchange-rate effect Interest-rate effect Sticky-Wage Theory Full-employment output Options The production of goods and services that an economy achieves in the long run when unemployment is at its normal rate a. b. The short-run aggregate supply curve slopes upward because nominal wages are slow to adjust to changing economic conditions. When a fall in the U.S. price level causes U.S. interest rates to fall, the real value of the...
We have prepared an article about the general economic
situation of India. Now, as a second assignment, our teacher asks
for a general comment and a question that has not been asked before
and the answer to that question. It is very important not to be
short. We should comment according to the information in the photo.
We have to ask a question and answer that question again with a
comment. a very urgent job.
1-Export Performance In recent years....
12) In the IS-LM Model, assuming a downward slop Model, assuming a downward sloping IS curve and an upward sloping LM curve; an increase in consumer wealth is going to A) cause a rightward shift of the IS curve. B) cause a rightward shift of the LM curve. C) cause a movement along the IS curve. D) cause a leftward shift of the LM curve. 13) The biggest difference between the 2008-09 recession and its aftermath, as compared to the...
B3. Open Economy IS-LM-FE model: The behaviour of households and firms in an open economy is represented by the following equations: Full-employment outputY-1200 red consumption Cd = 350 + 0.5Y-200r : Desired investmentd 250-300r Government purchasesG 95 Net exports : NX = 100-01-05e Real exchange rate : 90. Assume that the real interest rate, r, does not deviate from the foreign interest rate and that the economy is initially in general equilibrium. ve the open-economy IS curve writing the real...
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