Assume the exchange rate is defined as f/$. What is the real exchange rate? If there...
Assume the exchange rate is defined as f/$. What is the real exchange rate? If there is and appreciation of the $, what happens to the price of foreign goods measured in dollars and of US goods measured in the foreign currency? What is the effect on US imports and exports and Y. Explain.
Homework Answers
Real exchange rate is the exchange rate in real terms.
Real exchange rate = e P*/P
Where e = nominal exchange rate
P is home price
P* is the foreign price
If there is appreciation in dollars, it means that the home prices in US has been increased and real exchange rate will decrease, imports in US will increase and US exports will decrease .
Add Answer to:
Assume the exchange rate is defined as f/$. What is the real
exchange rate? If there...
What happens to the real exchange rate and net exports in each of the following cases?...
What happens to the real exchange rate and net exports in each of the following cases? a. The world interest rate rises (r*) b. expansionary fiscal policy at home i.e. domestic output rises c. Foreign demand for domestic goods falls as result of contraction fiscal policy at abroad d. Import restrictions i.e. quota or tariffs on foreign goods e. The domestic prices rise more than foreign prices f. nominal exchange rate e falls
What happens to the real exchange rate and net exports in each of the following cases?...
What happens to the real exchange rate and net exports in each of the following cases? a. Import restrictions i.e. quota or tariffs on foreign goods b. The domestic prices rise more than foreign prices c. nominal exchange rate e falls
What factors cause the real exchange rate to rise? What does real exchange rate appreciation (depreciation)...
What factors cause the real exchange rate to rise? What does real exchange rate appreciation (depreciation) imply for net exports? Why? What is PPP predicted real exchange rate? PPP predicted nominal exchange rate?
2. Which of the following best defines the real exchange rate? Group of answer choices the...
2. Which of the following best
defines the real exchange rate? Group of answer choices the price
of foreign bonds in terms of domestic bonds the price of foreign
currency in terms of domestic currency the price of domestic goods
in terms of foreign goods the price of domestic currency in terms
of foreign currency
Question 2 Which of the following best defines the real exchange rate? O the price of foreign bonds in terms of domestic bonds O the...
How do supply and demand determine the dollar exchange rate? The supply for dollars by importers...
How do supply and demand determine the dollar exchange rate? The supply for dollars by importers who sell dollars for the foreign currency interacts with the demand curve for dollars from buyers of exports from the US. The supply for dollars by those who are wanting to sell a foreign currency interacts with the demand curve for dollars from buyers who are buying foreign currency. The two governments get together and come to a conclusion regarding what rate they will...
3. a. Assume that the interest rate on Euro denominated assets is 5% and the interest...
3. a. Assume that the interest rate on Euro denominated assets is 5% and the interest rate on comparable dollar denominated assets is 10%. The spot exchange rate is $1/1E. If you expect the exchange rate changes to $1.05/1E, where would you want to keep your money? Calculate and show! b. The current interest rates on dollar and pound denominated deposits are 2% in the US and 3% in the UK. The current spot exchange rate is $2/1Pound. If the...
How is it possible for a country to import more goods than it exports?
(11)How is it possible for a country to import more goods than it exports? The government can subsidize imports. The government can subsidize exports. Foreigners can lend the country money. Private domestic banks can lend the country money. (12)The nominal foreign exchange rate is the value of foreign goods in the domestic currency. the value of domestic goods in the foreign currency.the rate at which one currency is traded for another. the difference between what a good costs in the domestic...
V. Consider an open economy in which the real exchange rate is fixed and equal to...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by С 10 + 0.8(Y-T), l 10, G-, 10, and T-10 Imports and exports are given by IM 0.3Y and X 0.3Y where Y" denotes foreign output. ECON 10SB Solve for equilibrium output in the domestic economy, given Y. What is the multiplier in this economy? If we were to close the economy-so exports and...
V. Consider an open economy in which the real exchange rate is fixed and equal to...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by C= 10 + 0.8(Y-T), l = 10, G = 10, and T= 10 Imports and exports are given by where Y" denotes foreign output. ECON 105B a. Solve for equilibrium output in the domestic economy, given Y". What is the multiplier in this economy? If we were to close the economy-so exports and imports...
The foreign exchange rate is defined as the Question 64 Not yet answered Points out of...
The foreign exchange rate is defined as the Question 64 Not yet answered Points out of 100 Remove flag Select one: © A. volume of the world currencies traded. B. equal to the amount of the current account deficit. C. equal to the amount of the capital account deficit. D. rate or the speed with which the currencies of the worlds are traded. E.price at which one currency exchanges for another. Other things remaining the same, as U.S. imports increase...
2. Which of the following best
defines the real exchange rate? Group of answer choices the price
of foreign bonds in terms of domestic bonds the price of foreign
currency in terms of domestic currency the price of domestic goods
in terms of foreign goods the price of domestic currency in terms
of foreign currency
Question 2 Which of the following best defines the real exchange rate? O the price of foreign bonds in terms of domestic bonds O the...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by С 10 + 0.8(Y-T), l 10, G-, 10, and T-10 Imports and exports are given by IM 0.3Y and X 0.3Y where Y" denotes foreign output. ECON 10SB Solve for equilibrium output in the domestic economy, given Y. What is the multiplier in this economy? If we were to close the economy-so exports and...
V. Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by C= 10 + 0.8(Y-T), l = 10, G = 10, and T= 10 Imports and exports are given by where Y" denotes foreign output. ECON 105B a. Solve for equilibrium output in the domestic economy, given Y". What is the multiplier in this economy? If we were to close the economy-so exports and imports...
The foreign exchange rate is defined as the Question 64 Not yet answered Points out of 100 Remove flag Select one: © A. volume of the world currencies traded. B. equal to the amount of the current account deficit. C. equal to the amount of the capital account deficit. D. rate or the speed with which the currencies of the worlds are traded. E.price at which one currency exchanges for another. Other things remaining the same, as U.S. imports increase...
Most questions answered within 3 hours.
-
What is aromaticity?
Identify aromatic molecules, especially those containing O, N,
S and B
asked 48 seconds from now -
A rubber solid circular wheel of uniform density spins about it
axis at rate of 60...
asked 10 minutes ago -
DNA evidence from an early human skeleton in Britain, shows that
early inhabitants of were blue...
asked 2 minutes ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 minutes ago -
To practice Problem-Solving Strategy 19.1 Work in Ideal-gas
Processes.
A cylinder with initial volume V contains...
asked 19 minutes ago -
Depreciation for Partial Periods Bean Delivery Company purchased
a new delivery truck for $35,400 on April...
asked 23 minutes ago -
Q 5.23:
Jonathan has been doing calculations to determine a missing
component. So far he has...
asked 21 minutes ago -
Use indifference curve and the daily income-leisure choice model
to explain graphically the behavior of employees...
asked 41 minutes ago -
Record the following transactions of Fashion Park in a
general journal. Fashion Park must charge 8...
asked 42 minutes ago -
Chapter 08 Python Assignment: Question 1-5
Please I need help in my python course.
Question 1...
asked 46 minutes ago -
1.
In a study of the effectiveness of
a new pain killer,
4646
out of
821821...
asked 1 hour ago -
Compare the equation of the forced vortex to the Bernoulli
equation in terms of:
Assumptions
Flow...
asked 1 hour ago