Question

Question text

Consumer tastes at home and abroad, international trade policy, and prices of domestic and foreign goods are all factors that affect a country's exports, imports, and net exports

Select one:

True

False

Purchasing-power parity does not hold at all times because the same goods produced in different countries may be imperfect substitutes for each other and many goods are not easily transported.

Select one:

True

False

The nominal exchange rate is the rate at which a person can trade the currency of one country for the currency of another country.

Select one:

True

False

Question text

If a U.S. business buys cloth from a Canadian business and the cloth is used to make a shirt that is sold to a U.S citizen then the cloth is not included in U.S. imports.

Select one:

True

False

Other things the same, an increase in U.S. real interest rates and/or a reduction in the default risk of U.S. assets would make foreigners more willing to engage in portfolio investment of U.S. assets

Select one:

True

False

Answer 1

(Q-1)

The above all factors has a huge impact on Influencing any country exports and  imports as depending on these variable government decides their policy regarding goods and services that can be imported or exported in a certain geographical location

Answer - True

(Q-2)

So a purchasing power always talk about the economic condition of the consumer in a particular geographical location and it is mainly used in comparing the purchasing power of two different nation based on their separate economic condition thus it will not be affected by the status or we can say useability of goods at any other nation as both the nations are treated separately

Answer - False

(Q-3)

Definitely nominal exchange rate is the rate at which a person can trade the currency of one country for the currency of another country, or it can also be defined as the number of a domestic currency unit that is needed to purchase another equivalent unit of another foreign currency

Answer - True

(Q-4)

as in this case, we have bought the raw material from Canada, even though it has been further processed then also it will be counted into US imports because we are using the raw material which is imported from a foreign country

Answer - False

(Q-5)

since here we can see that the default risk rate of U.S. asset has fallen and even there is an increase in the U.S. real interest rates thus due to all these now investor can have more profit in the market and they would like to indulge in more investment in U.S. as now more profit can be obtained from the financial sector, short term bond and protected securities thus by looking at all, however it is not limited to these sectors there are many other benifits too thus we can say there is a huge chance for profit and thus investment will increase.

Answer - True