7. When demand for dollars in foreign countries increases, the value of the dollar:A) decreases first and then increases.B) appreciates.C) depreciates.D) doesn't change.8. The marginal product of labor is:A) additional output produced when one additional unit of labor is added.B) value of additional output when one dollar's worth of additional labor is added.C) output divided by labor input.D) additional output produced when one additional unit of labor and one additionalunit of capital are added.9. In a small open economy, if exports equal $5 billion and imports equal S7 billion, thenthere is a tradeandnet capital outflow.A) surplus; positiveB) deficit; negativeC) surplus; negativeD) deficit; positive

The value of a dollar depends on the supply and demand of the dollar in the foreign market. The…

Answered: 7. When demand for dollars in foreign…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Time left 0:56 Currently, It takes two Belize dollars to buy a U.S. dollar. If that number were to rise to three, then the Belize currency would have (appreclated, depreclated) and It would be (more, less) expensive for American tourlsts to vacation In Bellze. Select one: a. depreclated; more O b. depreciated; less. Oc. appreciated; more. d. appreclated; less. Next page
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Nigeria is the world’s biggest producer of roses. The global demand for rosesincreases and at the same time Colombia’s central bank increases the interest rate.In the foreign exchange market for Nigerian naira, what happens to:i. The demand for naira?ii. The supply of naira?
A. Canada produces natural resources (coal, natural gas, and others), the demand for which has increased rapidly as China and other emerging economies expand. i. Explain how growth in the demand for Canada's natural resources would affect the demand for Canadian dollars in the foreign exchange market. Explain how the supply of Canadian dollars would change. ii. iii. Explain how the value of the Canadian dollar would change. iv. Illustrate your answer with a graphical analysis. 1
Question 38 If you go to the bank and notice that a dollar buys more Ghanaian cedis than it used to, then the dollar has appreciated. Other things the same, the appreciation would make Americans less likely to travel to Ghana. O appreciated. Other things the same, the appreciation would make Americans more likely to travel to Ghana. depreciated. Other things the same, the depreciation would make Americans less likely to travel to Ghana. depreciated. Other things the same, the depreciation would make Americans more likely to travel to Ghana.
4. Before 12th August 2005, the US Dollar (USD) was trading at 8.20 Renminbi yuan per dollar (RMB, China’s official currency) in the financial market of China. After that date, the USD was trading at only 7.50 RMB yuan per dollar in China. (1) If you received $100 US dollars from your friend in New York in July 2005, hold it for half a year and finally exchange it for RMB in Chengdu in late January 2006, how much value in RMB would you lose? (2) What is the percentage change in the US Dollar’s value?
Suppose that the price of the three-month forward pound is $1.97. Will a U.S. investor benefit from covered interest arbitrage? (Hint: The three- 1.5%.) month U.K. interest rate is 10% = 2.5%, and the three-month U.S. interest rate is No, because there will be a loss of 2%. O Yes, the investor will benefit by 4%. O No, because there will be a loss of 3%. O No, because there will be a loss of 4%.
Assume that initially PPP holds, if the inflation rate in your country falls relative to the inflation rate in the United States. The domestic currency is and will Select one: a. undervalued; appreciate b. undervalued; depreciate c. remain unchanged d. overvalued; appreciate e. overvalued; depreciate
3. According to relative PPP, if the U.S. interest rate is 9% and the Eurozone interest rate is 5%, then in the long run we would expect: A) the dollar to appreciate. B) the dollar to depreciate. C) the euro to appreciate. D) no change in the exchange rate. 4. Which of the following are explanations for sticky prices: A) long-term labor contracts. B) fixed exchange rates. C) menu costs. D) long-term labor contracts and menu costs Please answer both sir i will rate
The local currency in Peru is the Peruvian Nuevo Sol (PNS). In 2020, the official exchange rate between the PNS and the USD was 3 (i.e., 3 PNS = 1USD). Table 1 gives local currency prices of three goods in Peru and the United States. Table 1 also gives the expenditure shares of each good (i.e., what fraction of total expenditures do people spend on each good). Table 1. Local Prices & Expenditure Shares in Peru and the U.S. Item Expenditure Share Prices in Local Currencies Peru U.S. Corn (1 kg) T-Shirts (1 shirt) Rent (2 bedroom apartment) 0.3 6 PNS 2 USD 0.2 45 PNS 15 USD 0.5 1,000 PNS 1,000 USD 6. Calculate and report the Purchasing Power Parity (PPP) exchange rate between the PNS and the USD. PPP Exchange Rate: 7. Peru's GDP per capita in 2020 was 18,000 PNS. Calculate and report Peru's GDP per capita in USD using the Official Versus PPP exchange rates. Peru's GDP per capita in USD using Official Exchange Rate: Peru's GDP per capita in USD using PPP Exchange Rate: 8. Use the space…
Which of the following increases the price of the dollar relative to the Mexican peso? Select oneE a. an increase in the supply of dollars b. an increase in the demand for dollars C. a decrease in the supply of pesos d. an increase in the demnand for pesos
US $ in Canadian $ 02 D1 H J Quantity of US $ Note: If the image does not appear, right-click on the placeholder and choose Show picture or View image. Referring to the graph above, suppose that the demand for the American dollar shifts from D1 to D2. What might be the reason for this shift? a) The prices of Canadian goods and services have increased relative to American prices. b) The Canadian economy has entered a boom period. O c) The prices of American goods and services have increased relative to Canadian prices. d) The Canadian dollar has depreciated. O e) Interest rates in the USA have decreased relative to Canadian rates.

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