Currency Nov. 2016 exchange rate Euro Japanese yen Canadian dollar (per U.S. dollar) 0.7466 100.2 1.0436 (per U.S. dollar) 0.8009 114.61 L1331 The table above shows the exchange rates between various currencies and the U.S. dolar. Between 2015 and 2016, the U.S. dollar against the Japanese yen. O depreciated; depreciated against the Euro and appreciated; appreciated O appreciated; depreciated O depreciated; appreciated

Currency Nov. 2016 exchange rate Euro Japanese yen Canadian dollar (per U.S. dollar) 0.7466 100.2 1.0436 (per U.S. dollar) 0.8009 114.61 L1331 The table above shows the exchange rates between various currencies and the U.S. dolar. Between 2015 and 2016, the U.S. dollar against the Japanese yen. O depreciated; depreciated against the Euro and appreciated; appreciated O appreciated; depreciated O depreciated; appreciated

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A Canadian traveling to the United States converts $100 Canadian into 80 U.S. dollars. One month later he does the same thing and receives only 86 U.S. dollars. There are no transactions costs. The Canadian-U.S. exchange rate has and the Canadian dollar has relative to the U.S. dollar. O A. fallen; appreciated O B. increased; appreciated O C. not changed; remained stationary OD. fallen; depreciated O E. increased; depreciated
Calculate the Nominal and Real Exchange Rate Indices for the euro in periods 1 to 5. Period 12345 Nominal € Index $/€ rate $1.20/31 ? $1.40/£1 ? $1.25/£1 ? $1.50/£1 ? $1.15/31 ? US Price Index 100 105 110 130 135 Eurozone Price Index 100 110 120 130 155 Real € Index ? ? ? ? ? (Show your working in full) Comment on the evolution of real exchange rate of the euro over the periods 2 to 5 and compare the UK's overall price competitiveness is period 5 as compared to period 1.
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Assume the following exchange rates Value of Canadian Dollar in U.S dollars $.92 value of New Zealand dollar in U.S dollars $.32 Value of Canadian dollar in New Zealand dollars NZ $3.00 Given this information, starting with U.S dollar, you and others can perform triangular arbitrage by________. a. Using U.S dollar to buy New Zealand dollar at $.32. b. Using U.S dollar to buy Canadian dollar at $.92 c. Using New Zealand dollar to buy Canadian dollar at NZ$3.00 d. Using U.S dollar to buy Canadian dollar at NZ$3.00
Re
Purchasing-power parity (PPP) theory states that exchange rates would need to equalize the prices of goods in any two countries. For the dollar price Activity Frame o be the same in both countries, a U.S. citizen would need to be able to convert $5.74 into exactly GBP 3.29. To find the exchange rate at which hamburger purchasing power is the same in both countries, divide the price in the United States by the price in the United Kingdom: PPP Exchange Rate (U.S. Dollars per British pound) = $5.74 GBP 3.29 = $1.74 per pound The exchange rate that would have equalized the dollar price of a Big Mac in the United States and the Euro area (that is, the PPP exchange rate for Big Macs) is . This change would mean that the euro had against the dollar. If Big Macs were a durable good that could be costlessly transported between countries, which of the following would present an arbitrage opportunity? Check all that apply. Exporting Big Macs from the Euro area to the United States Exporting Big…
3. If the exchange rate changes from 1.50 Canadian dollars per U.S. dollar to 1.67 Canadian dollars per U.S. dollar, we say that the Canadian dollar has appreciated against the U.S. dollar. True False
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8. Why exchange rates matter Suppose that you go on vacation to Canada every summer. Last year, the hotel room where you stayed cost C$100 per night, and it costs the same this year. The exchange rate was 1.04 US$/C$ last year, and it is 0.95 US$/C$ this year. This means you will pay per night this year than you paid last year. The U.S. dollar-Canadian dollar exchange rate is essentially the price of a Canadian dollar in terms of U.S. dollars. When this price falls, the Canadian dollar is said to depreciate against the U.S. dollar. Thus, from your analysis, you can conclude that when the Canadian dollar depreciates against the U.S. dollar, Canadian goods and services become expensive for Americans. DeutschAuto is a German automaker that pays most of its production costs in euros. Suppose that in 2007, DeutschAuto's cost of producing a car was €23,000 and that the company sold a car in the United States for $36,000. Further, suppose that the dollar-euro exchange rate rose from 1.35$/ €…
QUESTION 6 From 1980 to 2000, the dollar-yen exchange rate fell from 240 yen/dollar to 102 yen/dollar, while the pound-dollar exchange rate fell from 2.22 dollars/pound to 1.62 dollars/pound. As a result, O A. the dollar appreciated relative to the yen, but depreciated relative to the pound O B. the dollar depreciated relative to the yen, but appreciated relative to the pound OC. the dollar appreciated relative to both the yen and the pound O D. the dollar depreciated relative to both the yen and the pound
a. Calculate the U.S. dollar-Swiss franc exchange rate, Es/franc, and the U.S. dollar-British pound exchange rate, Es, as of June 30, 2010. '$/£' b. What happened to the value of the U.S. dollar relative to the Swiss franc and the British pound between 2009 and 2010? Calculate the percentage change in the value of the U.S. dollar relative to each currency using the U.S. dollar-foreign currency exchange rates you calculated in (a). c. Using the information in the table for the most recent year, calculate the Japanese yen- Norwegian krone exchange rate.
Suppose a computer costs $500 in the United States. With the price of the computer given in the local currency, the Brazilian real is by Country Brazil (real) Mexico (peso) India (rupee) South Africa (rand) overvalued by 9%. overvalued by 45%. O undervalued by 90%. undervalued by 9%. Exchange Rate per U.S. Dollar 2.2 10 45 8 Price of a Computer in Local Currency 1,200 6,000 18,000 3,500