U.S. net export spending falls when?
the inflation rate is lower in the United States relative to other countries.
the price level in the United States falls relative to the price level in other countries.
the value of the U.S. dollar decreases relative to other Currencies.
the growth rate of U.S. GDP is faster than the growth rate of GDP in other countries.
U.S. net export spending falls when? the inflation rate is lower in the United States relative...
The U.S. dollar appreciated relative to other major trading currencies between 2014 and early 2016 primarily because U.S. exports were higher. demand for dollars had slumped in the intervening years. the United States had lower interest rates than other developed nations. U.S. multinationals had increased the investments in foreign markets. the U.S. economy had emerged from the great recession in better shape than that of any other developed nation. Which of the following occurred as a result of increased demand...
Question 3 (3 points) If the price level in the United States increases relative to other countries, then the U.S. will export: <Choose: more, fewer or the same amount of goods and services. A And the United States will import: <Choose: more, fewer or the same amount of goods and services. A Therefore, the net effect of an increase in the price level in the United States is that the amount of U.S. goods and services that are purchased will:...
Several factors affect the exchange rate of a currency with another currency. Which of the following statements are true about the factors that have an impact on exchange rates? Check all that apply. When a government limits imports and restricts foreign exchange transactions, its currency's value tends to increase relative to other currencies. An increase in inflation tends to increase the currency's value with respect to other currencies with lower inflation. If a government intends to prevent its currency's value...
[Use the information below to compare Switzerland (SWI), India (IND), and the United States (USA) in per capita terms, adjusted for price differences. You are given the following data table. Fill in the missing values. Population (column A) and GDP (D) are in millions. GDP in column D is in domestic currency, the Franc in Switzerland, the Rupee in India, and the U.S. dollar for the United States. The exchange rate (B) is units of foreign currency per U.S. $1,...
7. How large was $16.5 trillion. The exchange rate in 2014 was 61.0 rupees per dollar. India turns out to have lower prices than the United States (this is true more generally for poor countries): the price level in India (converted to dollars) divided by the price level in the United States was 0.280 in 2014. (a) What is the ratio of Indian GDP to U.S. GDP if we don't take into account the differences in relative prices and simply...
Question 19 1 pts Let's say that the following two changes take place in the United States: 1. Corporate tax rates increase, making it less attractive for domestic and foreign corporations to invest in the U.S. 2. The quality of U.S.goods deteriorates, thus decreasing the demand for U.S.goods. Which of the following will happen as a result of these two changes? The U.S. dollar will increase in value and the price of our exports will decrease. The U.S. dollar will...
Is it better if the U.S. dollar rises in value—or if the U.S. dollar falls in value against other countries' currencies? The question is important because the U.S. Secretary of the Treasury occasionally has the Federal Reserve System intervene to raise or lower the U.S. dollar (Remember from Macro?) relative to other currencies. However, such interventions are controversial, it creates "consequences". We blame China for manipulating their currency (mainly keeping it low to help exports). The answer to the question...
a. Gold Is $350 per ounce In the United States and 2.800 pesos per ounce In Mexico. The nominal exchange rate between U.S. dollar and Mexican pesos that is Implled by the PPP theory Is: pesos. b. Mexico experiences Inflation so that the price of gold rises to 4,200 pesos per ounce, whlle the price of gold remalns $350 per ounce In the United States. The nominal exchange rate between U.S. dollars and Mexican pesos that is Implied by the...
1. Suppose that the price level in the United States is 135 and the price level in Germany is 234. What would absolute purchasing power parity theory predict the dollar/euro exchange rate to be? 2. If the United States rate of inflation is 2% and the German rate of inflation is 5%, what would relative purchasing power parity predict about the value of the euro relative to the dollar, all other things equal?
QUESTION 3 What will happen when there is a decrease in the relative rate of productivity growth in Australia compared to other countries in the long run? Production costs will fall relative to other countries and the AUD will appreciate against other currencies. Production costs will rise relative to other countries and the AUD will depreciate against other currencies. Production costs will rise relative to other countries and the AUD will appreciate against other currencies. Production costs will fall relative...