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- a. What is purchasing power parity and how is it related to the law of one price?b. Is it reasonable to suppose that purchasing power parity holds in the long run but not in the short run?If the demand for the goods that we export increases______?Group of answer choices 1The exchange rate is unaffected. 2The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates). 3The exchange rate increases (the US $ appreciates). 4The exchange rate decreases (the US $ depreciates).QUESTION 22 3 pol Suppose that • The Elasticity of Imports in the USA in the short Run is 0.5 • The Elasticity of Imports in Japan in the short Run is 0.6 • The Elasticity of Imports in the USA in the long Run is 0.9 The Elasticity of Imports in the Japan in the long Run is 1 According to the Elasticities approach to the Current Account Balance, if the Exchange Rate goes from Yen=$1/100 to Yen $1/50 . O The Current Account Balance will be unchanged • The Current Account Balance in the US will deteriorate in the short run, and improve in the long run O The Current Account Balance in the US will deteriorate in the short run and in the long run O The Current Account Balance in the US will improve both in the short run and in the long run
- urgent dont chaptgpt answer Appreciation of the real exchange rate A. makes U.S. exports less expensive to foreigners. B. benefits all U.S. producers. C. makesJ.S. exports more expensive to foreigners. makest D. means a basket of U.S. goods would exchange for fewer foreign goods.QUESTION 9 China has been devaluing their currency. This makes sense economically because OA. It lowers the price of its exports B. It increases the price of its exports O C. There is no economic benefit1. Purchasing-power parity implies that the nominal exchange rate given as foreign currency per unit of home currency must rise if the price levels in a. foreign countries rise. C. both countries rise. b. the prices in the home country rise. d. both countries fall.
- If U.S. securities pay 6 percent interest, and if Great Britain’s securities pay 8 percent interest, then a. pounds depreciate relative to dollars. b. pounds appreciate relative to dollars. c. Great Britain’s imports will fall. d. Great Britain’s exports will rise.1. There are several reasons Purchasing Power Parity may not hold in reality. Among those reasons are: (Mark ALL that apply) A. The exact quality of goods varies between countries B. Some goods are not tradeable. C. Some countries have tariffs or other trade barriers. D. People's tastes vary between countries.Amerika lifts the quota that it applies on the products that it imports from Euro Area and at the same time there is a changing trend in the demand of Americans from EU products to the Japanese products, then how do you thing the following exchange rates will change under the conditions of floating exchange rate system?Sketch graphs a)Dollar/Yen b)Yen/Dollar
- 3 / 3 100% 每 8. The price of a laptop in the United States is $1,000. The price of a car in taly is 10,000 euros The current exchange rate rs09 curos per dollr. Ifa laptop is exported from the United Startes to Italy with no barriers to trade, what will be the price of the aptop in Italy? Ira car is imported to the United States from luh with barriers to trade, what will be the price of the crin ahe Ented Statres? Suppose the dollar appreciates by 0pereent aganscihecomo. Whr will be the price ofa computer exporied from the United States changem ltaly? -Suppose thhe dollarapprecites br 10 percentagamst the curoWt willbethe price of a car inmported to the Enred States from Ital chnge m tdhe Eaed Statese (8 marks) (2marks) 2marks) (2marks] (2marks)The Federal reserve can directly intervene in the foreign exchange markets by: a. lowering interest rates. O b. exchanging dollars for foreign currency. O c. imposing barriers on international trade O d. increasing the inflation rate. CLEAR MY CHOICEincreases the supply of dollars in the foreign exchange market. O a. A rise in the expected future exchange rate O b. A rise in the interest rate in the U.S. relative to the interest rate in other countries An increase in the exchange rate O d. A decrease in the exchange rate A fall in the interest rate in the U.S. relative to the interest rate in other countries O e.