Homework Answers
As exports are part of the Supply curve of Foreign exchange, Then the supply of foreign exchange will increase.
as US market exports more, the goods goes out and money comes in, in the form of foreign exchange reserves, thus in the US market supply of foreign exchange will rise.
OPTION C is correct
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Questions 3-5 correspond with the US Market for Foreign Exchange with Japan, where the price of...
Everything else the same, if the price level in Japan rises relative to the price level...
Everything else the same, if the price level in Japan rises relative to the price level in the U.S., a. the supply of dollars and the demand for yen in the foreign exchange market will decrease. b. the supply of dollars and the demand for yen in the foreign exchange market will increase. c. the demand for dollars and the supply of yen in the foreign exchange market will decrease. d. the yen will appreciate. e. the dollar will depreciate....
answer these 4 . will rate after Which of the following increases the price of the...
answer these 4 . will rate after
Which of the following increases the price of the dollar relative to the Mexican peso? o an increase in the demand for dollars an increase in the supply of dollars O an increase in the demand for pesos an increase in the supply of pesos If a Germany company must purchase products from a U.S. firm, it must first O convert its euros into US dollars in the foreign exchange market. O convert...
Assume that Japan and the US are trading partners. a..Draw a model showing the foreign exchange...
Assume that Japan and the US are trading partners. a..Draw a model showing the foreign exchange for the US dollar(compared with the yen) b. Draw another model showing the foreign exchange rate for the yen(compared to the US dollar) c. Now assume that the US federal reserve institutes a policy that raises interest rates in the United States relative to interest rates in Japan. Is this a fiscal or monetary policy? d. Show what happens on both models - based...
The graph below shows demand and supply curves for U.S. dollars in the foreign exchange market. As...
The graph below shows demand and
supply curves for U.S. dollars in the foreign exchange
market. As you can see, the exchange rate (in terms of
foreign currency units per dollar) is initially equal to
E0.
Suppose that next year there’s
a huge increase in the number of foreigners – from Europe, China,
and everywhere else – who decide to visit the U.S. as
tourists.
How would this huge increase in tourism in the U.S. affect the
exchange rate? To answer this,...
The U.S. (Home country) and Japan (Foreign country) are trading with each other in the auto...
The U.S. (Home country) and Japan (Foreign country) are trading with each other in the auto industry. Both are large countries in this market for cars. The U.S. imports cars from Japan. The U.S. demand curve for cars is given by: D =210 – 30P The U.S. supply curve for cars is given by: S = 30+ 30P Japan’s demand curve for cars is given by: D* = 50 – 10P Japan’s supply curve for cars is given by: ...
The graph shows the foreign exchange market. Draw a point at the equilibrium exchange rate and...
The graph shows the foreign exchange market. Draw a point at the equilibrium exchange rate and the equilibrium quantity of dollars. Draw a horizontal line at a price at which there is a surplus of dollars. Label it Surplus. Draw an arrow that shows the change in the quantity demanded as the foreign exchange market moves from the price at which you have indicated the surplus toward equilibrium. Label it 1. Exchange rate (yen per U.S. dollar) 1.4 1.5 1.6
Demand for a country's currency in the foreign exchange market is given by where XR is...
Demand for a country's currency in the foreign exchange market is given by where XR is the US dollar price of the currency, and A is the quantity of the currency. Supply for Country A's currency in the foreign exchange market is given by The central bank of the country fixes the exchange rate at 62 USD. The central bank needs to sell A = ________ in the foreign exchange market to maintain the fixed exchange rate. [Fill in the...
5. Changes in the foreign-exchange market The following questions focus on the exchange rate between the euro and the D...
5. Changes in the foreign-exchange market The following questions focus on the exchange rate between the euro and the Danish krone. Assume the exchange rate is flexible. The exchange rate is defined as the number of euros you must pay for one krone. Suppose an economic downturn in Denmark causes Danish incomes to decrease, while European incomes remain unchanged Shift the appropriate curve or c on the following graph to illustrate how this affects the market for Danish kroner if...
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,...
1a. In the foreign exchange market, a decrease in the world demand for Japanese exports a....
1a. In the foreign exchange market, a decrease in the world demand for Japanese exports a. shifts the demand curve for yen leftward, which causes the yen to appreciate. b. shifts the demand curve for yen rightward, which causes the yen to appreciate. c. shifts the demand curve for yen rightward, which causes the yen to depreciate. d. shifts the demand curve for yen leftward, which causes the yen to depreciate. 1b. A relatively high rate of inflation in the...
answer these 4 . will rate after
Which of the following increases the price of the dollar relative to the Mexican peso? o an increase in the demand for dollars an increase in the supply of dollars O an increase in the demand for pesos an increase in the supply of pesos If a Germany company must purchase products from a U.S. firm, it must first O convert its euros into US dollars in the foreign exchange market. O convert...
The graph below shows demand and
supply curves for U.S. dollars in the foreign exchange
market. As you can see, the exchange rate (in terms of
foreign currency units per dollar) is initially equal to
E0.
Suppose that next year there’s
a huge increase in the number of foreigners – from Europe, China,
and everywhere else – who decide to visit the U.S. as
tourists.
How would this huge increase in tourism in the U.S. affect the
exchange rate? To answer this,...
The graph shows the foreign exchange market. Draw a point at the equilibrium exchange rate and the equilibrium quantity of dollars. Draw a horizontal line at a price at which there is a surplus of dollars. Label it Surplus. Draw an arrow that shows the change in the quantity demanded as the foreign exchange market moves from the price at which you have indicated the surplus toward equilibrium. Label it 1. Exchange rate (yen per U.S. dollar) 1.4 1.5 1.6
5. Changes in the foreign-exchange market The following questions focus on the exchange rate between the euro and the Danish krone. Assume the exchange rate is flexible. The exchange rate is defined as the number of euros you must pay for one krone. Suppose an economic downturn in Denmark causes Danish incomes to decrease, while European incomes remain unchanged Shift the appropriate curve or c on the following graph to illustrate how this affects the market for Danish kroner if...
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,...
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