If countries A and B are the only two countries in the world, then if the currency of country A appreciates, the currency ofcountry B...O a. May appreciate or depreciate, depending on the elasticity of demand for the exports of country A.O b. May appreciate or depreciate, depending on the volume of trade between the two countries.O c. Must appreciate.O d. Can appreciate relative to other countries.O e. Must depreciate.

Here, it is given that the world has only two countries named as country A and country B.

Answered: If countries A and B are the only two…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Under a gold standard in which France defined one franc to be worth 1/50th of an ounce of gold and the U.S. defined one dollar to be worth 1/10th of an ounce of gold, then - one U.S. dollar would exchange for five French francs. - the French franc is worth only one-tenth as much as the dollar is worth. - one French franc would exchange for ten dollars. - the U.S. dollar is valued at one-fifth of the French franc.
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U.S. firms involved in international trade have to a. ignore U.S. inflation and ignore value of the dollar relative to foreign currencies. b. ignore U.S. inflation and guess value of the dollar relative to foreign currencies. Oc. International transactions are not affected by inflation or foreign exchange. O d. anticipate U.S. inflation and guess value of the dollar relative to foreign currencies. e. anticipate U.S. inflation and ignore value of the dollar relative to foreign currencies.
When there is political instability in another country, the United States can expect O an increase in the financial account balance due to the movement of assets to the U.S. a decrease in the balance of payments due to a decrease in the demand for goods and services. O a decrease in the balance of payments due to a decrease in official reserve transactions. an increase in the financial account balance due to an increase in the current account.
A short-run increase in government spending causes the currency to and output to O appreciate; increase O appreciate; decrease O depreciate; increase O depreciate; decrease
Suppose that Japan has adopted a floating exchange rate for its currency, the Japanese Yen. When the Japanese central bank conducts monetary policy that raises interest rates in Japan, the Demand for Japanese Yen will and the Japanese Yen will O increase; appreciate O decrease; appreciate O increase; depreciate O decrease; depreciate
Complete the sentence. The quantity of Canadian dollars supplied in the foreign exchange market depends on O A. the demand for Canadian dollars in the foreign exchange market O B. decisions of the Bank of Canada O C. the exchange rate O D. the price of gold
A Guatemalan citizen working in Canada sends remittances to her family in Guatemala. This transaction appears as a... O negative entry in the Guatemalan Capital and Financial Account O positive entry in the Guatemalan Capital and Financial Account O negative entry in the Guatemalan Current Account O negative entry in the Canadian Capital and Financial Account O negative entry in the Canadian Current Account
In the U.S. balance of payments, foreign purchases of assets in the United States are a O debit, or outpayment. current account item. O foreign currency outflow. O foreign currency inflow.
The value of the currency of Country X appreciates relative to the currency of Country Y. How will this affect producers? O A. Producers in Country Y will benefit from a decline domestic competition. B. Producers in Country X will benefit from increased consumption of their goods in Country Y. C. Producers in Country X will benefit from a decline domestic competition. D. Producers in Country Y will benefit from increased consumption of their goods in Country X.
What is the exports effect? The exports effect is the result that the lower the exchange rate, other things remaining the same, the O A. higher are the prices of Canadian-produced goods and services to foreigners and the greater is the volume of Canadian imports O B. lower are the prices of foreign-produced goods and services to Canadians and the greater is the volume of Canadian exports O C. higher are the prices of foreign-produced goods and services to Canadians and the greater is the volume of Canadian imports O D. lower are the prices of Canadian-produced goods and services to foreigners and the greater is the volume of Canadian exports Click to select your answer and then click Check Answer. All parts showing Clear All Check Answer P Type here to search 立

QUESTION 5 How can a central bank support a fixed exchange rate? Note: Multiple answers are possible. O A. by buying and selling foreign currency O B. by changing the interest rate O C. by increasing government spending O D. by investing in infrastructure

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