Describe the sources of supply and demand in the market for loanable funds and the market for foreign-currency exchange. And explain why in the market for loanable funds, the supply curve has a positive slope and the demand curve has a negative slope?

Q: Foreign Direct Investment is viewed by some economic proponents as a great boost to the Balance of…

A: A foreign direct investment (FDI) is a financial investment made by a company or individual from one…

Q: What are foreign exchange markets? Why does the State Bank of Vietnam intervene in the foreign…

A: When economies are open to trade, they interact in international market at a specific exchange rate.

Q: Give an example in the recent past when the Central Bank intervene in the foreign exchange market in…

A: Answer: Foreign exchange intervention is one of the main functions of any central bank, in this…

Q: In the Model of Open Economy (Figure 1 below), use Saving (S), Investment (1). Net Export (NX), Net…

A: Here, some of the economic activities are mentioned as demand and supply of loanable funds, and…

Q: Why is exchange rate important in International Finance? Can we get rid of Exchange rate in…

A: A. The value of the currency of one nation in terms of the currency of another nation is known as…

Q: The two graphs show hypothetical markets for loanable funds and foreign-currency exchange in a small…

A: In the market for loanable funds, the equilibrium interest rate is determined at a point where the…

Q: when a domestic investor buys a foreign asset, the financial account would rise, stay the same or…

A: When a domestic investor buys a foreign asset ,  the financial account status can be explained as…

Q: State whether each of the following events involves a financial flow to the Mexican economy or a…

A: Financial flows refer to the movement of financial capital, such as money for investments from…

Q: Match the following international transactions to the correct type of foreign investment by choosing…

A: In the international financial market, investors can make an investment in two ways such as foreign…

Q: Show the effects of an increase in the world interest rate on the market for loanable funds and the…

A: The market of loanable funds is base in the concept that the market interest rate is determined by…

Q: In the Mundell-Fleming model of the open-economy, what is:   A. The condition for equilibrium in…

A: Mundell-Fleming Model: This model describes how a small economy works when it is open to…

Q: State whether each of the following events involves a financial inflow to or outflow from the Kenyan…

A: Financial flow refers to the flow of money in any form from one place to another. It could be in the…

Q: Variations in the foreign exchange rate can impact on the profitability of business. Explain what…

A: Exchange rate fluctuations impact trade and businesses in various ways. The nominal exchange rate is…

Q: Use the three-panel diagram for the open economy (inclusive of the economy's loanable funds market…

A: Exchange rate is the rate which one country's currency is exchanged for another country's currency.

Q: What are the two most plausible reasons why countries become international lenders? What two…

A: Countries become international lenders for various reasons, often driven by economic and strategic…

Q: ASSESS HOW FIRMS CAN REDUCE THEIR COST OF CAPITAL BY TAPPING INTO MORE DEVELOPED FOREIGN CAPITAL…

A: A capital market is essentially a system by which individuals, businesses, and governments with an…

Q: ) True or False? In Mankiw’s model of an open economy, the demand for loanable funds has two…

A: a) Mankiw's model of an economy, the demand for loanable funds has two components: one is the need…

Q: It is known that the Indonesian economy can be written into the following equations: Y -C+1+G+ NX Y…

A: Y=8000 G=2500 T=2000 C=500+2/3(Y-T) I=900-50r NX=1500-250E r=r*=5

Q: What is the link between the foreign exchange market and the real economy

A: The foreign exchange market is the market where countries can buy, sell, exchange, and speculate the…

Q: Using words and a graph, explain how the equilibrium in the foreign exchange market takes place.…

A: The exchange rate for all currencies is set by the foreign exchange market, a worldwide…

Q: Why do exchange rates matter to companies, especially those involved with the foreign direct…

A: Exchange rate (ER) tells us how much of a currency (home) is valued against the other (foreign).…

Q: Explain the determinants of a nation's foreign exchange rate.

A: A nation's foreign exchange rate is between two currencies. Basically, "trade rates are how much one…

Q: Draw a correctly labeled graph of the foreign exchange market for dollars between US and Japan. Show…

A: Non-residents net purchases of local assets are referred to as capital inflows. Capital outflows are…

Q: Using the foreign exchange market (CAD/EURO), suppose price level in Canada is higher compared to…

A: Exchange rate is the rate at which national currencies are exchanged . And exchange rate is…