number 2 please 1. The exchange rate for 1 dollar was 1.1 Euros and 1.3 Peso one month ago. Now, the exchange rate for1 dollar is 1.3 Euros and 1.2 Peso. We can say:A) the dollar has appreciated relative to both Euro and Peso.B) the dollar has depreciated relative to both Euro and Peso.C) the dollar has appreciated relative to Euro and depreciated relative to Peso.D) the dollar has depreciated relative to Euro and appreciated relative to Peso.E) none of the above2. An appreciation of the dollar would result in:A) foreign travel for U.S. residents to be more expensive.B) an increase in the dollar prices of foreign goods paid by U.S. importers.C) an increase in the foreign demand for U.S. goods.D) a decrease in the foreign currency prices paid for U.S. goods.E) none of the above

Ans 2. Currency appreciation refers to the increase in value of one currency relative to another in…

2. An appreciation of the dollar would result in: A) foreign travel for U.S. residents to be more expensive. B) an increase in the dollar prices of foreign goods paid by U.S. importers. C) an increase in the foreign demand for Ú.S. goods. D) a decrease in the foreign currency prices paid for U.S. goods. E) none of the above

2. An appreciation of the dollar would result in: A) foreign travel for U.S. residents to be more expensive. B) an increase in the dollar prices of foreign goods paid by U.S. importers. C) an increase in the foreign demand for Ú.S. goods. D) a decrease in the foreign currency prices paid for U.S. goods. E) none of the above

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 8PA

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1. The exchange rate for 1 dollar was 1.1 Euros and 1.3 Peso one month ago. Now, the exchange rate for 1 dollar is 1.3 Euros and 1.2 Peso. We can say: A) the dollar has appreciated relative to both Euro and Peso. B) the dollar has depreciated relative to both Euro and Peso. C) the dollar has appreciated relative to Euro and depreciated relative to Peso. D) the dollar has depreciated relative to Euro and appreciated relative to Peso. E) none of the above 2. An appreciation of the dollar would result in: A) foreign travel for U.S. residents to be more expensive. B) an increase in the dollar prices of foreign goods paid by U.S. importers. C) an increase in the foreign demand for U.S. goods. D) a decrease in the foreign currency prices paid for U.S. goods. E) none of the above
View the data below for the exchange rate between the US dollar and the Japanese yen. How many yen could you get per dollar at the earliest date shown on the chart? Explain. How many yen could you get per dollar at the most recent date shown on the chart? Explain. Has the dollar appreciated or depreciated in value over time? Explain.
Find the following cross rates. a) Chinese Yuan/Japanise Yen (i.e. how many Chinese Yuan are needed to buy 1 Janapise Yen?) b) UK Pound/Mexican Peso (i.e. how many Pounds are needed to buy 1 Peso?)
1. The dollar appreciated by 25% relative to the yen and the direct exchange rate is now 1 in the US. Find the old exchange rate prior to the dollar appreciation. 2. Find the rate of appreciation of the yen. 3. Find the rate of change of the direct exchange rate of the yen in the US.
See attached.
11. Suppose that apples were the only good produced in the United States and Mexico. In Mexico, apples sell for 12 pesos apiece. In the Unites states, apples sell for $0.50 apiece. a. According to the theory of Purchasing Power Parity, what is the equilibrium nominal exchange rate between the U.S. dollar and the Mexican peso? What would the real exchange rate between the U.S. and Mexico in that case? b. Suppose the price of apples rises at a rate of 3% per vear in the U.S., but at a rate of 12% per year in Mexico. According to PPP, by how much should we expect the nominal U.S dollar/Mexican peso exchange rate to change in the course of 1 year (up, or down, and by what %)? c. Starting at the exchange rate you calculated in (a), and assuming the rates of inflation remain the same as in (b), what nominal exchange rate would you expect in 3 years?
The nominal exchange rate of the Australian dollar is 0.67. The CPI in the US is 300 and the same basket costs 430 in Australia. (a) What can you say about the purchasing power parity holding for Australia? Show calculation. Answer: 0.96 (b) The nominal Australian GDP is $1.5 trillion. Find Australia’s purchasing power parity GDP. Which one is more relevant for most purposes? What is the other one used for? Answer:1.56
1.The ¥/US$ exchange rate fell from ¥240/US$ to ¥102/dollar, while the US$/£ exchange rate fell from US$2.22/£ to US$1.62/£. As a result, A.the dollar appreciated relative to the yen, but depreciated relative to the pound. B.the dollar appreciated relative to both the yen and the pound. C.the dollar depreciated relative to the yen, but appreciated relative to the pound. D.the dollar depreciated relative to both the yen and the pound. 4.A rise in the real exchange rate is called A.a real depreciation. B.a real bargain. C.a real devaluation. D.a real appreciation. 3.The idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency is called A.purchasing power parity. B.equity. C.efficiency. D.the tragedy of the commons. 4.Purchasing power parity does not hold in the short to medium run because A.exports don’t equal imports. B.exchange rates fluctuate too much. C.most business cycles are caused by shocks to…
The dollar appreciated by 25% and now buys 100 yenThat would give you the old buying power at 80 yen.And that would mean that the yen depreciated by 20%.And the rate of change of the exchange rate is also -20%. Find the rate of change of the direct exchange rate of the yen in the US.
1. The price of one currency in terms of another is called a) purchasing power parity. b)the terms of trade. C)the exchange rate. D)a currency band. 2. An exchange-rate system in which the nominal exchange rate is set by the government is known as A)a flexible-exchange-rate system. B)a floating-exchange-rate system. C)an exchange-rate union. D)a fixed-exchange-rate system. 3. When the domestic currency strengthens under a fixed-exchange-rate system, this is called A)a devaluation. B)a revaluation. C)a depreciation. D)an appreciation. 4. Three-wheel cars made in North are sold for £5,000. Four-wheel cars made in South are sold for DM10,000. The real exchange rate between North and South is four three wheel cars for three four-wheel cars. The nominal exchange rate between the two countries is A)DM0.50/£ B)DM0.66/£ C)DM1.50/£ D)DM2.00/£ 5. When the domestic currency buys fewer units of foreign currency, the A)nominal exchange rate falls. B)nominal exchange rate rises. C)real…
IN US$ PER US$ FRI THURS FRI THURS Americas Argentina 0.0172 0.0172 58.278 58.2427 peso Brazil real 0.2431 0.2401 4.1127 4.1655 Canada dollar 0.7619 0.7612 1.3126 1.3138 Chile peso 0.001407 0.001404 710.7 712 The above table shows U.S.-dollar foreign-exchange rates in New York trading (Oct. 19, 2019). Source: Wall Street Journal. Which currency depreciated from Thursday to Friday? Which currency appreciated?
nt. e euro the > ces 6. In the foreign exchange market in which U.S. dollars are exchanged for Mexican pesos, which of the following will occur when the demand for the U.S. dollar increases? a. The dollar will depreciate. b. The peso will appreciate. c. The supply of pesos will shift to the right. The demand for the dollar will shift to the left. e. The real exchange rate will decrease. rates • Discuss th rate regin • Describe exchange Explain h exchange