Suppose the exchange rate value of the dollar depreciates. Who wins and who loses?
- Suppose the exchange rate value of the dollar depreciates. Who wins and who loses?
Homework Answers
When the dollar depreciates, the supply of dollar is more than the demand for dollar.
This will decrease the relative price of domestic goods and services and increase the relative price of foreign goods and services.
As a result, the exporters win and the importers lose as exports rise and imports fall.
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Suppose the exchange rate value of the dollar depreciates. Who
wins and who loses?
Suppose the dollar-euro exchange rate is 1.56$/€ and the dollar-peso exchange rate is 0.072$/peso. A US...
Suppose the dollar-euro exchange rate is 1.56$/€ and the dollar-peso exchange rate is 0.072$/peso. A US firm is considering a new project. The project will cost 2852 pesos and $173 today and will generate 105€ and $142 of revenue next year. The real interest rate is 4%. a.) What is the present value of cash flow today in dollars? b.) What is the present value of cash flow from next year in dollars?
5. Suppose the current spot exchange rate is $1.17 to €1. The dollar is expected to...
5. Suppose the current spot exchange rate is $1.17 to €1. The dollar is expected to appreciate to $1.11 to €1 during the next year. (Assume inflation and risk etc. are the same between the Eurozone and the U.S.) (a) What is the expected currency appreciation gain for the dollar? (Give this as a percentage and round to the nearest 0.1%.) (b) Suppose the interest rate on 1-year corporate bonds in the U.S. is 4%. What is the expected total...
5. Suppose the current spot exchange rate is $1.17 to €1. The dollar is expected to...
5. Suppose the current spot exchange rate is $1.17 to €1. The dollar is expected to appreciate to $1.11 to €1 during the next year. (Assume inflation and risk etc. are the same between the Eurozone and the U.S.) (a) What is the expected currency appreciation gain for the dollar? (Give this as a percentage and round to the nearest 0.1%.) (b) Suppose the interest rate on 1-year corporate bonds in the U.S. is 4%. What is the expected total...
Suppose the exchange rate between the Danish krone and the U.S. dollar is 14 DKK =...
Suppose the exchange rate between the Danish krone and the U.S. dollar is 14 DKK = $1 and the exchange rate between the Chilean peso and the U.S. dollar is 220 CLP = $1. The exchange rate between the U.S. dollar and the Danish krone in terms of dollars per krone is $ (Round your response to four decimal places.) The exchange rate between the U.S. dollar and the Chilean peso in terms of dollars per peso is $ ....
56. Suppose that on each play of the game a gambler either wins 1 with probability p or loses 1 w...
Hi, please new answer and
clear to read Thank you
56. Suppose that on each play of the game a gambler either wins 1 with probability p or loses 1 with probability 1 - p. The gambler continues betting until she or he is either up n or down m. What is the probability that the gambler quits a winner
56. Suppose that on each play of the game a gambler either wins 1 with probability p or loses 1...
Suppose the exchange rate of 9 Euros to the dollar moves to 10 Euros to the...
Suppose the exchange rate of 9 Euros to the dollar moves to 10 Euros to the dollar. The dollar has _____, making American goods _____ expensive for Europeans. a) appreciated; more b) depreciated; more c) appreciated; less d) depreciated; less
Suppose that the euro/US dollar exchange rate changes from 1,3 dollar per euro to 1,1 dollar...
Suppose that the euro/US dollar exchange rate changes from 1,3 dollar per euro to 1,1 dollar per euro. Then: a) The euro has depreciated against the dollar. b) This will decrease the demand for Eurozone goods by the United States. c) This will lead to a rise in exports by the United States to the Eurozone. d) The euro has appreciated against the dollar.
I. Suppose the pound/dollar exchange rate on Monday is 1.5 and on the following Friday is...
I. Suppose the pound/dollar exchange rate on Monday is 1.5 and on the following Friday is 1.6 a. Briefly discuss what has happened to the price of the domestic currency in terms of the foreign currency (Since we live in the U.S., our domestic currency is U.S. dollars). b. Has the value of the dollar increased or decreased during the week? What has happened to the purchasing power of the dollar in terms of the pound? Briefly explain. c. Has...
Exchange Rates The chart below shows the exchange rate between the U.S. dollar and the Mexican...
Exchange Rates
The chart below shows the exchange rate between the U.S. dollar
and the Mexican peso in 2015 and 2016. In these questions we’ll
focus on changes in 2015. Note that the chart
shows the exchange rate in terms of pesos per
dollar.
Suppose a meal at a restaurant in Mexico City cost 90
pesos in 2015. Read approximate figures from
the chart for the exchange rate in January 2015 and January 2016,
and use those figures to answer the following...
1.) $802, $902, $1,002, $1,202 2.) increases/decreases 3.) depreciates/appreciates 6. Pricing foreign goods The nominal exchange...
1.) $802, $902, $1,002, $1,202
2.) increases/decreases
3.) depreciates/appreciates
6. Pricing foreign goods The nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate speofies how many units of one country's currency are needed to buy one unit of another country's currency. Suppose the following table presents nominal exchange rate data for November 26, 2014, in terms of U.5. dollars per unit of foreign curreno, Ue the information in the table to...
Suppose the exchange rate between the Danish krone and the U.S. dollar is 14 DKK = $1 and the exchange rate between the Chilean peso and the U.S. dollar is 220 CLP = $1. The exchange rate between the U.S. dollar and the Danish krone in terms of dollars per krone is $ (Round your response to four decimal places.) The exchange rate between the U.S. dollar and the Chilean peso in terms of dollars per peso is $ ....
Hi, please new answer and
clear to read Thank you
56. Suppose that on each play of the game a gambler either wins 1 with probability p or loses 1 with probability 1 - p. The gambler continues betting until she or he is either up n or down m. What is the probability that the gambler quits a winner
56. Suppose that on each play of the game a gambler either wins 1 with probability p or loses 1...
I. Suppose the pound/dollar exchange rate on Monday is 1.5 and on the following Friday is 1.6 a. Briefly discuss what has happened to the price of the domestic currency in terms of the foreign currency (Since we live in the U.S., our domestic currency is U.S. dollars). b. Has the value of the dollar increased or decreased during the week? What has happened to the purchasing power of the dollar in terms of the pound? Briefly explain. c. Has...
Exchange Rates
The chart below shows the exchange rate between the U.S. dollar
and the Mexican peso in 2015 and 2016. In these questions we’ll
focus on changes in 2015. Note that the chart
shows the exchange rate in terms of pesos per
dollar.
Suppose a meal at a restaurant in Mexico City cost 90
pesos in 2015. Read approximate figures from
the chart for the exchange rate in January 2015 and January 2016,
and use those figures to answer the following...
1.) $802, $902, $1,002, $1,202
2.) increases/decreases
3.) depreciates/appreciates
6. Pricing foreign goods The nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate speofies how many units of one country's currency are needed to buy one unit of another country's currency. Suppose the following table presents nominal exchange rate data for November 26, 2014, in terms of U.5. dollars per unit of foreign curreno, Ue the information in the table to...
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