Homework Answers
Solution
Trade balance=Exports-Imports
When the dollar depreciates w.r.t other currencies ,the foreign goods will become more expensive ,due to the prices being converted to dollars ,while the US goods will become cheaper for other countries in their currency.This will lead to increase in exports and decrease in imports.This will reduce the trade deficit or increase the trade surplus i.e will have a positive impact on trade balance.
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pound. 16) If the dollar depreciates, what will happen to the U.S. trade balance?
What is likely to happen if U.S. inflation increases by more than British inflation? Check all...
What is likely to happen if U.S. inflation increases by more than British inflation? Check all that apply: The supply of pounds decreases. The demand for pounds decreases. The exchange rate movement is unclear. The demand for pounds increases. The dollar appreciates. The supply of pounds increases. The dollar depreciates.
Suppose that the U.S. considers devaluing its dollar against a foreign currency to improve the trade...
Suppose that the U.S. considers devaluing its dollar against a foreign currency to improve the trade balance. What type of currency contracting would definitely worsen the U.S. trade balance? O The U.S. import contracts are written in foreign currency and the U.S. export contracts are written in dollars. O The U.S. import contracts are written in dollars and the U.S. export contracts are written in foreign currency. O Both of the U.S. import and export contracts are written in dollars....
What will happen to the trade balance and the real exchange rate of the US if...
What will happen to the trade balance and the real exchange rate of the US if Congress decreases government purchases to balance the budget? Graph this situation using the open economy model. What happens when countries outside the US implement fiscal austerity to satisfy the IMF?
4. Assume that exchange rates are the following: Dollar/Pound: 1.60, Yen/Dollar = 100, Yen/Pound = 160...
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Suppose that $.90 U.S. = 1 Canadian dollar, and .60 British pounds = $1 U.S. What is the cross rate of the Canadian dollar for the British pound? How many Canadian dollars for a pound?
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Calculate Percent Change Assume the the British Pound U.S. Dollar exchange rate changes from £1.6566/$ to £1.8522/$ What is the percentage change of the U.S. Dollar? O A. +10.56% OB. -11,81% O C. +11.81% D. -10.56% O E. None of answers is correct
Use the information below to answer the questions that follow. U.K. Pound (£) Canada dollar U.S....
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U.S Trade Deficit Discussion Questions for U.S. Trade Deficit Discussion 1. What is the current US...
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The trade feedback effect shows that O A 50 million dollar increase in U.S. exports results...
The trade feedback effect shows that O A 50 million dollar increase in U.S. exports results in a 30 million dollar decrease in German imports. 0 A 100 million dollar increase in U.S. imports results in a 50 million dollar decrease in French imports. O A 100 million dollar increase in U.S. imports results in a 70 million dollar increase in U.S. exports. O A 1 billion dollar increase in U.S. GDP increases U.S. net exports by 100 million dollars.
When the value of the U.S. dollar is declining relative to other currencies this means that:...
When the value of the U.S. dollar is declining relative to other currencies this means that: Multiple Choice U.S. firms will be less profitable The U.S. trade balance will worsen. U.S. exporters will face a greater challenge in exporting U.S.-made products U.S. exporters will have a temporary advantage over The U.S. trade balance will worsen. U.S. exporters will face a greater challenge in exporting U.S.-made products. U.S. exporters will have a temporary advantage over other countries in foreign trade. U.S....
Suppose that the U.S. considers devaluing its dollar against a foreign currency to improve the trade balance. What type of currency contracting would definitely worsen the U.S. trade balance? O The U.S. import contracts are written in foreign currency and the U.S. export contracts are written in dollars. O The U.S. import contracts are written in dollars and the U.S. export contracts are written in foreign currency. O Both of the U.S. import and export contracts are written in dollars....
4. Assume that exchange rates are the following: Dollar/Pound: 1.60, Yen/Dollar = 100, Yen/Pound = 160 Now assume the following inflation rates over the next year will be: U.S.= 3%, Japan = 1%, and U.K. = 1.5%. What will be the exchange rates one year from now, assuming that Purchasing Power Parity holds: a) Dollar/Pound b) Yen/Dollar c) Yen/Pound
Calculate Percent Change Assume the the British Pound U.S. Dollar exchange rate changes from £1.6566/$ to £1.8522/$ What is the percentage change of the U.S. Dollar? O A. +10.56% OB. -11,81% O C. +11.81% D. -10.56% O E. None of answers is correct
Use the information below to answer the questions that follow. U.K. Pound (£) Canada dollar U.S. $ EQUIVALENT CURRENCY PER U.S. $ 1.5763 .6344 1.0161 .9842 Which would you rather have, $100 or £100? 100 Pounds A Which would you rather have, $100 Canadian or £100? 100 Pounds What is the cross-rate for Canadian dollars in terms of British pounds? (Do not include the Canadian dollar sign, C$. Round your answer to 4 decimal places, e.g., 32.1616.) Cross-rate C$ 1.0161...
U.S Trade Deficit Discussion Questions for U.S. Trade Deficit Discussion 1. What is the current US trade balance? trade balances of other industrialized nations (Choose 2)? 2. What are some 3. What are some characteristics that could be used to describe countries with which the US has a trade deficit? her 4. Which of the arguments either for or against sustaining the trade deficit-do you find more persuasive? Why? 5. What are the tradeoffs described by the arguments for and...
The trade feedback effect shows that O A 50 million dollar increase in U.S. exports results in a 30 million dollar decrease in German imports. 0 A 100 million dollar increase in U.S. imports results in a 50 million dollar decrease in French imports. O A 100 million dollar increase in U.S. imports results in a 70 million dollar increase in U.S. exports. O A 1 billion dollar increase in U.S. GDP increases U.S. net exports by 100 million dollars.
When the value of the U.S. dollar is declining relative to other currencies this means that: Multiple Choice U.S. firms will be less profitable The U.S. trade balance will worsen. U.S. exporters will face a greater challenge in exporting U.S.-made products U.S. exporters will have a temporary advantage over The U.S. trade balance will worsen. U.S. exporters will face a greater challenge in exporting U.S.-made products. U.S. exporters will have a temporary advantage over other countries in foreign trade. U.S....
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