Homework Answers
1 - Option A
The currency of country A will depreciate in comparison to the currency of country B
This is because the inflation rate in A is more , hence the purchasing power or the value of the currency will decrease. This will indicate the depreciation of the currency of country A.
2 - Option C
Inflation rate in country A divided by the inflation rate in country B.
This is the correct formula for finding the correct inflation rate.
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Question 6 (4 points) ✓ Saved If inflation in country A exceeds inflation in country B,...
This Question: 2 pts 43 of 50 (32 complete) This Test: 100 pts possible EQuestion Help Suppose that a currency's va...
This Question: 2 pts 43 of 50 (32 complete) This Test: 100 pts possible EQuestion Help Suppose that a currency's value is found to be overvalued by using purchasing power parity. Then OA. the interest rate in the country will change in order to restore purchasing power parity B. the currency will depreciate in the future but we don't know when. C. the currency will appreciate in the future but we don't know when. D. we know when and how...
the first one Suppose a basket of goods costs $100 in the U.S. and €50 in...
the
first one
Suppose a basket of goods costs $100 in the U.S. and €50 in France. What exchange rate, in dollars per euro, would be consistent with purchasing power parity? $1 $2 $1.50 $0.50 and Suppose a country's central bank announces that it is increasing the money growth rate. The country's currency will suddenly its rate of depreciation will then appreciate; rise appreciate; fall depreciate; rise O depreciate; fall In the long run, with variable real exchange rates, if...
19 20 QUESTION 19 A country with a floating exchange rate faces a short-run recession and...
19 20
QUESTION 19 A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful? O Only with increasing output O Only with increasing the current account balance O No, not with either goal Yes, with both goals QUESTION 20 and output will In the short run, if the central bank decreases the money supply,...
9 and 10 thanks QUESTION 9 In the long run, with relative PPP, if country A...
9 and 10 thanks
QUESTION 9 In the long run, with relative PPP, if country A consistently has higher inflation than country B, then country A's currency will be against country B's. A. maintaining its value B. depreciating C. appreciating QUESTION 10 If investors believe a country's currency is fixed at a fundamentally overvalued level, the central bank's foreign reserves will most likely be rising True False QUESTION 11 and currency will If Foreign decreases its interest rate, Home's output...
19. Consider the following Solow-Swan model in which output per capita is given by y-Aks, the...
19. Consider the following Solow-Swan model in which output per capita is given by y-Aks, the total factor productivity parameter is 2, the savings rate is 50%, the depreciation rate is 20% and the population growth rate is 5%. The steady state value of the output per capita, y, for this economy is: 1 a. b. 4 c. 8 d. 16 20. Which of following best describes when purchasing power parity does and does not hold? a. A country with...
Question 3 (25 points) The table below summarizes the information on the price of a Samsung Galaxy Tablet in the U...
Question 3 (25 points) The table below summarizes the information on the price of a Samsung Galaxy Tablet in the United States, Canada, Mexico, and Brazil; and the exchange rate between the US dollar and the currency of each of the other 3 countries on November 17, 2019. Country Price of a compact car in domestic currency Exchange rate (unit of foreign currency per US dollar United States 379.99 U.S. Dollar Canada 501.59 Canadian Dollar Mexico 5,390.28 Mexican Peso 1.32...
17 18 QUESTION 17 Suppose a country's central bank announces that it is decreasing the long-run...
17 18
QUESTION 17 Suppose a country's central bank announces that it is decreasing the long-run money growth rate to tame inflation. The country's currency will suddenly and its rate of depreciation will then O appreciate; rise O depreciate; rise appreciate; fall O depreciate; fall QUESTION 18 A balance of payments crisis is OA a sharp change in interest rates sparked by a change in expectations about the level of exports. ов. a sharp change in foreign reserves sparked by...
Question 1. (1) (6 points) Some economic historians have noted that during the period of the...
Question 1. (1) (6 points) Some economic historians have noted that during the period of the gold standard, gold discoveries were most likely to occur after a long deflation (for example, in 1896). Why might this be true (max 5 sentences)? You can assume that the price of gold against currency was fixed. Hint: The gold standard means that 1 HKD is exchanged with gold at a fixed rate. What does the long deflation mean about the value of gold...
LIGI Variagement 4. Interest rate parity Aa Aa D The rise of globalization is due to the many companies that have b...
LIGI Variagement 4. Interest rate parity Aa Aa D The rise of globalization is due to the many companies that have become multinational corporations for various reasons-for example, to access better technology, to enter new markets, to obtain more raw materials, to find funding resources, to minimize production costs, or to diversify business risk. This multimarket presence exposes companies to different kinds of risk as well--for example, political risk and exchange rate risk. The relationship between interest rates and exchange...
Question 29 Flag qu Not yet answered Points out of 2.0 If a country applies dollarization...
Question 29 Flag qu Not yet answered Points out of 2.0 If a country applies dollarization to its currency, it has adopted a Select one: O a. fixed exchange rate with another currency. O b. floating exchange rate O c. managed float of its currency. O d. dirty float of its currency
This Question: 2 pts 43 of 50 (32 complete) This Test: 100 pts possible EQuestion Help Suppose that a currency's value is found to be overvalued by using purchasing power parity. Then OA. the interest rate in the country will change in order to restore purchasing power parity B. the currency will depreciate in the future but we don't know when. C. the currency will appreciate in the future but we don't know when. D. we know when and how...
the
first one
Suppose a basket of goods costs $100 in the U.S. and €50 in France. What exchange rate, in dollars per euro, would be consistent with purchasing power parity? $1 $2 $1.50 $0.50 and Suppose a country's central bank announces that it is increasing the money growth rate. The country's currency will suddenly its rate of depreciation will then appreciate; rise appreciate; fall depreciate; rise O depreciate; fall In the long run, with variable real exchange rates, if...
19 20
QUESTION 19 A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful? O Only with increasing output O Only with increasing the current account balance O No, not with either goal Yes, with both goals QUESTION 20 and output will In the short run, if the central bank decreases the money supply,...
9 and 10 thanks
QUESTION 9 In the long run, with relative PPP, if country A consistently has higher inflation than country B, then country A's currency will be against country B's. A. maintaining its value B. depreciating C. appreciating QUESTION 10 If investors believe a country's currency is fixed at a fundamentally overvalued level, the central bank's foreign reserves will most likely be rising True False QUESTION 11 and currency will If Foreign decreases its interest rate, Home's output...
19. Consider the following Solow-Swan model in which output per capita is given by y-Aks, the total factor productivity parameter is 2, the savings rate is 50%, the depreciation rate is 20% and the population growth rate is 5%. The steady state value of the output per capita, y, for this economy is: 1 a. b. 4 c. 8 d. 16 20. Which of following best describes when purchasing power parity does and does not hold? a. A country with...
Question 3 (25 points) The table below summarizes the information on the price of a Samsung Galaxy Tablet in the United States, Canada, Mexico, and Brazil; and the exchange rate between the US dollar and the currency of each of the other 3 countries on November 17, 2019. Country Price of a compact car in domestic currency Exchange rate (unit of foreign currency per US dollar United States 379.99 U.S. Dollar Canada 501.59 Canadian Dollar Mexico 5,390.28 Mexican Peso 1.32...
17 18
QUESTION 17 Suppose a country's central bank announces that it is decreasing the long-run money growth rate to tame inflation. The country's currency will suddenly and its rate of depreciation will then O appreciate; rise O depreciate; rise appreciate; fall O depreciate; fall QUESTION 18 A balance of payments crisis is OA a sharp change in interest rates sparked by a change in expectations about the level of exports. ов. a sharp change in foreign reserves sparked by...
Question 1. (1) (6 points) Some economic historians have noted that during the period of the gold standard, gold discoveries were most likely to occur after a long deflation (for example, in 1896). Why might this be true (max 5 sentences)? You can assume that the price of gold against currency was fixed. Hint: The gold standard means that 1 HKD is exchanged with gold at a fixed rate. What does the long deflation mean about the value of gold...
LIGI Variagement 4. Interest rate parity Aa Aa D The rise of globalization is due to the many companies that have become multinational corporations for various reasons-for example, to access better technology, to enter new markets, to obtain more raw materials, to find funding resources, to minimize production costs, or to diversify business risk. This multimarket presence exposes companies to different kinds of risk as well--for example, political risk and exchange rate risk. The relationship between interest rates and exchange...
Question 29 Flag qu Not yet answered Points out of 2.0 If a country applies dollarization to its currency, it has adopted a Select one: O a. fixed exchange rate with another currency. O b. floating exchange rate O c. managed float of its currency. O d. dirty float of its currency
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