d) King's Landing (KL) generally runs a trade surplus. Do you think this is mainlyrelated to: (i) high foreign demand for goods made in KL; (ii) low demand forforeign goods in KL; (iii) a high saving rate relative to investment in KL; or (iv)structural barriers against imports into KL? Explain your answer. [25 marks]

(i) High foreign demand for goods made in KL:Imagine KL produces dragonscale armor, which is highly…

Answered: d) King's Landing (KL) generally runs a…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 1PA

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PRICE (Peso per dollar) 9. Study Questions and Problems #9 The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that inflation rates increase in the United States. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scenario. ? QUANTITY OF DOLLARS (Millions per day) D If inflation rates increase in the United States, the U.S. dollar ŏ S D S
Assume that the total value of investment transactions between the United States and Mexico is minimal. Also, assume that the total dollar value of trade transactions between these two countries is very large. Now assume that Mexico's inflation has suddenly increased, and Mexican interest rates have suddenly increased. a) Please draw a graph to show how the equilibrium value of Mexican Pesos will change. b) What's more important for Mexican Pesos given the circumstances, change in interest rates, or change in inflation in Mexico?
14- the difference between the current account and total trade (merchandise trade and service trade) is equal to Please select one; a) foreign direct investment plus portfolio investment plus cross-border loans and bank deposits nwww ww b) income payments plus unilateral transfers c) the change in international reserves d) international reserves minus statistical discrepancy e) foreign direct investment plus portfolio investment
9) Which of the following can lead to an increase in the demand for Japanese yen compared to the U.S. dollar? a) an increase in the relative price of Japanese-made goods b) an increase in the interest rate in Japan relative to the U.S. rate c) a decrease in the amount of yen bought by the U.S. government d) a decrease in the demand for goods made in Japan 10) Which of the following statements is NOT true? a) If a country's exports exceed its imports, then there is a trade surplus. b) If the balance of trade is positive, then the balance of payments is also positive. c) If a country's balance of trade is positive, then its exports exceed its imports. d) A country's balance of trade includes trade in both goods and services.
Question 5 [Consider a prosperous open economy such as Singapore. If Singapore’s saving rate (gross domestic saving as a % of GDP) is 25%, while its investment rate (domestic investment as a % of GDP) is 20%, the economy will experience a trade surplus, meaning that receipts from exports exceed expenditure on imports. Your answer: [True/False/Uncertain and explain why]
Q1-9 If, because of Japan's high saving rate (in excess of domestic investment spending) Japan invests overseas, then this investment can cause ______ of the Japanese yen and thus a consequent trade _____ for Japan. a. a depreciation / deficit b. a depreciation / surplus c. an appreciation / deficit d. an appreciation / surplus
)Listen Foreign direct investment is the term used to describe purchases of firms in another country that involve A) internationally traded goods across countries B) the exchange rate market C) taking a management responsibility D) using another currency
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7-) Question: Policies that tend to cause Please select one or more option: www.WA a) decrease investment / a trade surplus b) increase investment / a trade surplus c) increase investment / a trade deficit d) decrease investment / a trade deficit e) increase investment / no effect on the trade balance 8-) Question: A real exchange rate . could result from an . in ...... .... ........ .... Please select one or more: a) depreciation / increase / taxes b) appreciation / increase / taxes c) appreciation / increase / government spending d) depreciation/ decrease / government spending e) appreciation / decrease / the world interest rate
Suppose Japanese government tightens controls on exports by Japanese companies. All else being equal, how would above affect:(i) U.S. demand for Japanese yen?(ii) supply of yen for sale?(iii) equilibrium value of yen? Be detailed in each of your answers
You work for a Nova Scotia Company trying to successfully enter the cranberry market in Australia. Analyze the entry country (Australia) based on the following; What are the major exports, dollar value, and trends? What are the major imports, dollar value, and trends? Does the entry country have a surplus or deficit for trade? What are the exchange rates? Are there any restrictions on currency trade? You should also consider sweat shops, skilled labor, employee unrest, political and social activists and labor unions in your analysis.
Suppose a British investor is expected to receive payment of 150,000 dollars ($) in twelve months from a U.S. bank. The annual interest rate in dollar deposit is 5% and the annual interest rate in pound deposit is 10%. If the present exchange rate is 0.50 pound per dollar deposit and interest parity holds, then. (a) How many pounds does the British investor expect to receive at the maturity date of his U.S. investment? (Show the computation process). (b) How many pounds were initially invested? Fully explain all your answers (calculation).

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