If the dollar used to buy 100 yen and now buys 360 yen, there has beenAnswer1. appreciation of the dollar.2. depreciation of the dollar.3. appreciation of the yen.4. an increase in special drawing rights.

The exchange rate refers to the price of one currency in terms of another currency and the change in…

Answered: If the dollar used to buy 100 yen and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If Australia were pegging the Australian dollar to the US dollar and also trying to sterilize the effects of its exchange market intervention, then when it buys US dollars on the foreign exchange market, it should also sell Australian government bonds. buy US government bonds. sell US government bonds. buy Canadian government bonds.
A. Canada produces natural resources (coal, natural gas, and others), the demand for which has increased rapidly as China and other emerging economies expand. i. Explain how growth in the demand for Canada's natural resources would affect the demand for Canadian dollars in the foreign exchange market. Explain how the supply of Canadian dollars would change. ii. iii. Explain how the value of the Canadian dollar would change. iv. Illustrate your answer with a graphical analysis. 1
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See attached.
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If the dollar used to buy 100 yen and now buys 360 yen, there has been Answer 1. appreciation of the dollar. 2. depreciation of the dollar. 3. appreciation of the yen. 4. an increase in special drawing rights.