Define nominal exchange rate and real exchange rate. What are the two main types of exchange-rate systems? What explains the behavior of net exports represented by the J curve? How does real exchange rate affect net exports? Explain and give one example.

Define nominal exchange rate and real exchange rate. What are the two main types of exchange-rate systems? What explains the behavior of net exports represented by the J curve? How does real exchange rate affect net exports? Explain and give one example.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Briefly explain any one component of the capital account
Consider the following open economy. Real GDP Consumption Government Expenditures Investment Exports Taxes Transfers 1,000 800 115 280 22 195 79 What is net foreign investment (NFI)? Round to two decimal places, enter the negative sign if appropriate, and do not enter a currency symbol. If your answer is $1.125, enter 1.13.
Imports and short-run output: In addition to depending on the exchange rate (and therefore on the interest rate), imports may depend on short-run output: when the economy is booming, consumers tend to demand more foreign goods. To incorporate this result into our short-run model, suppose the new net exports equation is Derive the IS curve with this new equation, and explain how it differs from the standard IS curve in the short-run model.
A country with higher nominal interest rates than its trading partners will see its exchange rate depreciate in value relative to the currencies of its trading partners in the long run. Is this statement true or false? Briefly explain why.
According to a survey ("Big MacCurrencies," The Economist, April 17th 1993), in 1993, the average price of a Big Mac in the U.S. was $2.28. In Japan, Big Mac fans had to fork out ¥391 for this feast. What was the PPP implied exchange rate between the $ and the ¥?
We saw in class that PPP conversion factors are different from market exchange rates because they are based on the actual purchasing powers of currencies. The table below shows the GDP of different countries in their local currency along with their GDP at the market exchange rate, population, and the PPP conversion factor. country GDP in 2017 GDP (US$s, at market ex.) PPP factor роpulation Japan 544¥ trillion $4.86 trillion 105 ¥/$ 127.5 million India 1717 trillion $2.65 trillion 20 7/$ 1339 million |Мexico 22 trillion pesos $1.16 trillion 11 pesos/$ 129 million Which country has the higher GDP per capita measured in purchasing power, India or Mexico? Mexico's average income is more than double India's India's average income is more than double Mexico's Mexico and India have similar average incomes not enough information is provided
n chapter 11, "International Economics," of Naked Economics, Charles Wheelan discusses international exchange rates, how these are determined, and how exchange rates impact the economy. Of the statements below, Wheelan includes all of them in his discussion of the value of the British pound (the Briish currency) in 1992, EXCEPT for this one. Which of the below statements does the NE chapter on "International Economics" NOT include? (What does this chapter NOT say?) Group of answer choices The international exchange rate for the British pound (or any other currency) in the international exchange rates market is determined by demand for that currency relative to its supply. By increasing real interest rates to prop up the British pounds the British government would also be boosting the British economy which was in a state of economic recession at that time. To prop up (increase) the exchange rate for the British pound the British government could use monetary policy and increase…
i need the answer quickly