If a bushel of wheat costs $10 in the United States and 5 pounds in the United Kingdom, the long-run exchange rate must be 1. A. 2 pounds per dollar. B. 2.5 dollars per pound. C. 1.5 pounds per dollar. D. 1.8 dollars per pound. E. None of the above.

If a bushel of wheat costs $10 in the United States and 5 pounds in the United Kingdom, the long-run exchange rate must be 1. A. 2 pounds per dollar. B. 2.5 dollars per pound. C. 1.5 pounds per dollar. D. 1.8 dollars per pound. E. None of the above.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: the balance of trade is $50 million and the balance of the capital account is-$40 million, what is…

A: Current account:The current account is part of the balance of payments accounts. The current account…

Q: Explain whether the fall in the AUD-USD exchange rate is likely to increase or reduce Australia’s…

A: The AUD-USD exchange rate, which represents the number of US dollars that can be exchanged for 1…

Q: Suppose the price of a burger is $4.50 Canadian in Toronto, and the exchange rate is 103 U.S. cents…

A: The price of a burger in Canada: $4.50 Exchange rate= 1 Canadian dollar= $1.03 US dollar PUS= E*PC…

Q: The demand curve for a currency will typically slope down, because, for a given future value of a…

A: The demand for a foreign currency occurs as people have to pay for the imported goods. Another…

Q: A negative value for the line item "Changes in official international reserves" in the balance of…

A: The objective of the question is to understand what a negative value for the line item 'Changes in…

Q: Two countries, the US and England, produce only one good, wheat. Suppose the price of wheat is $2.50…

A: The movement of currency from one country to another country through exchange is called the exchange…

Q: Capital flight is the sudden large drop in demand for domestic assets. Explain the following: if we…

A: Capital flight is the flow of domestic financial resources to foreign countries. The capital flight…

Q: Assume that the current Yen/Dollar exchange rate is one Dollar equals 100 Yen. Using a graph show…

A: The Foreign Exchange (FOREX) market plays a crucial role in the global economy by enabling…

Q: In the foreign exchange market, when the U.S. interest rate rises, the supply of dollars ________…

A: Answer: Option A (decreases; rises) Explanation: When the U.S. interest rate rises investors will…

Q: A change in the euro-dollar exchange rate from $1 per epro to $2 per euro would the U.S. price of…

A: The exchange rate between two nations' currency is generally defined as the price of one nation's…

Q: A negative value for the line item "Changes in official international reserves" in the balance of…

A: The objective of the question is to understand what a negative value for the line item 'Changes in…

Q: 1. A. Calculate the current account for U.S. based on the following data for 2018. Export of goods…

A: Balance of payment , also popularly called Bop, is an account maintaining the economic transactions…

Q: a. What is the cost of the car in euros? € o. Suppose the exchange rate changes to US$1= €0.75. What…

A: a) US $1 = €0.85 Now the cost of the car in terms of dollar is given as $20000 Now the cost in…

Q: A new country has been established on the moon and created a currency called cheesybits. Which of…

A: Answer: A transaction will be called a foreign exchange transaction if buyers and sellers are from…

Q: raw a demand for dollars curve. Label it D. raw a supply of dollars curve. Label it S. raw a point…

A: Demand curve of dollar is label as D Supply curve of dollar is label as S Equilibrium is at E…

Q: 3. At the end of June 21, the exchange rate between the US Dollar (USD) and the Canadian Dollar…

A: Exchange rate determines currency appreciation and depreciation . When exchange rate increases,…

Q: The U.S. price of corn is $100 per ton, and the exchange rate between the U.S. dollar and the…

A: ANS 1. Price of corn = $100 per ton. The exchange rate between ¥120 = $1.00 Therefore, a good that…

Q: Consider an economy governed by a gold standard. Draw a supply and demand graph that models the…

A: “Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: The arrows in Figures A-D represent possible movements of the exchange rate (euros per U.S. dollar)…

A: An exchange rate is the rate at which one currency can be exchanged for another currency. It…

Q: not use ai please

A: Under the gold standard, a French Franc would have been worth 0.80 US dollarsGiven:French Franc: 160…

Q: In 2002, the United States placed higher tariffs on imports of steel. According to the open-economy…

A: The objective of the question is to understand the impact of higher tariffs on imports of steel by…

Q: A weaker U.S. dollar will likely increase demand from global buyers for U.S. wheat and beef. A.…

A: Exchange rate: - the exchange rate is the rate at which the currency of one country can be exchanged…

Q: Suppose the quality of Hong Kong products relative to foreign products deteriorates. a. Explain how…

A: international trade among countries occur due to some cost advantage (absolute or relative), as some…

Q: Draw a demand for dollars curve. Label it D. Draw a supply of dollars curve . Label it S. Draw a…

A: Exchange rate:It is the rate at which currencies are exchanged for another currency. It affects the…

Q: In our pretend world there are two countries - Chile and Switzerland - that are engaged in trade.…

A: Trade between countries involves the exchange of goods and services, often facilitated by currency…

Q: Country X is a major oil exporter. It has a floating exchange rate system and has managed to…

A: Given that: Floating exchange rate system fall in oil prices- from $100 a barrel to $29 a barrel

Q: What are the assumptions of a Monopolistic Competition market structure? Briefly distinguish the…

A: An industry in monopolistic competition is one composed of an enormous number of little firms who…

Question

Given the above information, what is the initial current account balance
for this economy?
3.
A. Current account deficit of $205.
4
B. Current account deficit of $125.
C. Current account surplus of $125.
D. Current account surplus of $150.
E. None of the above.
Consider the above information. If government spending falls by $50,
what is the change in the current account balance?
4.
A. -$35
В. —$15
C. $10
D. $35
E. None of the above.
Consider the above information. Beginning at the initial equilibrium
output, suppose instead that exports rise by 50. What is the change in
the current account balance?
5.
A. –$25
В. $45
С. —$75
D. $35
E. None of the above.

If a bushel of wheat costs $10 in the United States and 5 pounds in the
United Kingdom, the long-run exchange rate must be
1.
A. 2 pounds per dollar.
B. 2.5 dollars per pound.
C. 1.5 pounds per dollar.
D. 1.8 dollars per pound.
E. None of the above.
Which of the following is an assumption of the monetary approach to
the exchange rates?
A. Purchasing power parity (PPP) holds.
B. Uncovered interest parity (UIRP) holds.
C. Prices are flexible.
D. All of the above.
E. Only A and C of the above.
Use the following information to answer questions 3 - 5.
Consider the following economy:
s = 0.2 (marginal propensity to save)
0.2 (marginal propensity to import)
I, = 500 (investment)
Go = 300 (government spending)
TX, = 200 (taxes)
EX,
I Mo
m
400 (exports)
100 (autonomous import spending)
%3D
2.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Please show the solutions to all the question from 1-5. I need to know how to solve all of them
Which of the following is not included in the current account?a. exports of goodsb. imports of goodsc. U.S. capital inflow and outflowd. unilateral transfers
If the exchange rate moves from $1 for one Euro to $1.50 for one Euro, then Select one: a. it becomes more expensive for a European to buy a European product. b. it becomes more expensive for an American investor to save at an American bank. c. it becomes more expensive for an American to buy a Mexican product. d. it becomes more expensive for an American to buy a European product.
only typed solution
The capital account on the United States' balance of payments includes ALL BUT WHICH of the following transactions? a. Changes in ownership of foreign stocks. b. The sale of U.S. automobiles to German consumers. c. Foreign investors construct a factory on U.S. soil. d. The purchase of U.S. bones by a foreign government. e. A U.S. firm buys property in a foreign country.
The graph shows the supply curve of Canadian dollars. Draw a new supply curve that shows the effect of a rise in the expected future exchange rate. Label it. A change in the expected future exchange rate changes the supply of Canadian dollars________, and a change in Canadian demand for imports changes the supply of Canadian dollars O A. today; today B. in the future; today C. today; in the future D. in the future; in the future 120 MacBook Pro 110 100- 90- 80- 70- Exchange rate (Canadian cents per Canadian dollar) Click the graph, choose a tool in the palette and follow the instructions to create your graph. So 70 80 90 100 10 20 30 40 50 60 Quantity (billions of Canadian dollars per day) >>> Draw only the objects specified in the question.
#4 please
Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1% of Germany’s GDP; private savings is 20% of GDP; and physical investment is 18% of GDP. a. Based on the national saving and investment identity, what is the current account balance? b. If the government budget surplus falls to zero, how will this affect the current account balance?
Dollars per Franc So .70 60 .50 40 Do D2 3 4 5 6 7 Quantity of Francs (Milions) Refer to Figure 14.1. Suppose that the United States increases its imports from Switzerland, resulting in a rise in the demand for francs from Do to D1. Under a floating exchange rate system, the new equilibrium exchange rate would be: Select one: а. $0.40 per franc b. $0.50 per franc С. $0.60 per franc d. $0.70 per franc