Consider an economy that lasts for two periods, period 1 and period 2. Let TBị denotes the trade bal- ance in period t, CAq the current account balance in period 1, and Bj the country's net international investment position at the end of period 1. Let r denote the interest rate paid on assets held for one period. Assume net international payments to employees, net unilateral transfers, and valuation changes are always equal to zero, so that in period t = 1, 2:
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- Country A and Country B both have the production function: Y = F(K,L) = K^(1/3)L^(2/3).5. On October 25 2015, one Euro traded for 1.106 US dollars, and thus one Us dollar traded for 0.942 Euros. If 0.942 is marked on the vertical axis of the diagram depicting equilibrium in the Euro-US dollar market, what should be measured on the horizontal axis? O. The quantity of US dollars, that is traded for Euros. O. The quantity of Euros, that is traded for all other currencies. O. The quantity of US dollars, that is traded for all other currencies. O. The quantity of Euros, that is traded for US dollars.The banks that are permitted in the conduct of foreign exchange operations are included in the __________ association of banks. What are the foreign assets of the BSP held, mostly as an investment in foreign issuing facilities, monetary gold, and foreign exchange $2,000 The amount of funds that the bank holds to ensure that it is able to meet liabilities in case of sudden withdrawal, influences the decrease or increase of money supply and interest rate. So whatever the amount involved, what do you call that? It influenced the increase or decrease of the money supply and interest rate It is the process of consolidating the control and coordination of cash flows across different business units, rotations, currencies, and banks accounts It refers to the collection of laws, processes, and regulations that prevent legally obtain money from entering the financial system, it sets limits on how much cash an individual can hold Who is the new BSP Government/
- Assume that for a closed economy, E = C + I + G,where E = Total expenditure on Consumption Goods,I = Exp. on Investment GoodsG = Govt. spendingFor equilibrium, we must have E=Y, Y being total income received.For a certain Economy, it is given that C=15 + 0.9Y, where I=20 + 0.05Y and G=25.Find the equilibrium values of Y, C, and I. How will these change, if there is no Govt.spending?We need to choose best among the three available investment alternatives high-risk stock, low-risk stock and savings account. Fixed payoff o: 500€ for savings account for the deposited amount. 200€ fixed fee needs to be paid towards trading charges. Payoffs details depends on market conditions as mentioned below. Which investment option you will choose and why? If you need any more details to solve this problem, please make your assumptions and list all the assumptions that you made. Market Up Market Same Market Down High Risk 1700 300 -800 Low Risk 1200 400 100 Probability 0.5 0.3 0.2When the Fed raises the required reserve ratio, then the: a. ability of banks to make loans is restricted. b. ability of banks to make loans is enhanced. c. ability of banks to make loans is unaffected. d. interest rate that banks pay to the Fed to borrow money is increased. e. interest rate that banks pay to other banks to borrow money is increased.
- Assume the following scenario Company A Company B Company C (Wants Fixed) (Wants Float) (Wants Float) Fixed 8% Float 7% Amount $1,000,000 7% 8% $500,000 10% 10% $500,000 How much does each company save by engaging in interest rate swaps if we assume each company shares the benefits evenly with their counterparty.Assume that a remittance of $1,500 will be withdrawn in peso. What would be the income of the bank given the following information: BR = 51.25; SR = 52.75 ; RR = 52?Assume that the Bank of Ecoville has the following balance sheet and the Fed has a 10% reserve requirement in place: Balance Sheet for Ecoville International Bank ASSETS LIABILITIES Cash $33,000 Demand Deposits $99,000 Loans 66,000 Now assume that the Fed lowers the reserve requirement to 8%. If the money multiplier is 5, how much money will ultimately be created by this event?
- Using the fundamental equation of the asset approach to exchange rates for two countries, Home and Foreign, show graphically the effect on expected rate of return on Home and Foreign deposits and on the spot exchange rate in the following cases: a. The expected exchange rate E H/F, increases, but interest rates in both countries remain unchanged. b. The interest rate on Home and Foreign deposits increases by the same amount and the expected exchange rate remains unchanged.A loan of 200,000 is to be repaid with level monthly payments based on a 30 -year amort zation schedule. At the end of 7 years, The loan will be paid off with a balloon payment. The annual effective interest rate is 7%. Calculate the amount of the balloon payment. ◻ 181,677 181,950 182,979 183,593 183,625Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is $38. Suppose that the world price of meekers is $36. Assume that Meekertown is too small to influence the world price of meekers once it enters the international market. If Meekertown allows free trade, then it will meekers. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertownian consumers were better off without free trade than they are with it. Meekertownian producers were worse off without free trade than they are with it. True or False: When a country is too small to affect the world price, allowing free trade will sometimes decrease total surplus in that country, regardless of whether it imports or exports as a result of international trade. True False