If there is a significant increase in foreign demand for our exports, and the exchange rate between the dollar and other currencies is expressed as E = units of foreign currency per dollar, what is likely to happen to E in a flexible exchange rate regime? Select one: O a. E will rise. O b. E will fall. O c. E will plummet, as speculators expect it to fall further. O d. E will be unchanged, as the government offsets any market forces that might move the exchange rate.

If there is a significant increase in foreign demand for our exports, and the exchange rate between the dollar and other currencies is expressed as E = units of foreign currency per dollar, what is likely to happen to E in a flexible exchange rate regime? Select one: O a. E will rise. O b. E will fall. O c. E will plummet, as speculators expect it to fall further. O d. E will be unchanged, as the government offsets any market forces that might move the exchange rate.

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

Answer it correctly please. I ll rate accordingly with multiple votes. Do it correct and fast. Explain well.
Assume that the U.S. interest rate is 12 percent, while the British interest rate is 15 percent. If interest rate parity exists, then: O a.U.S. investors will earn 12 percent whether they use covered interest arbitrage or invest in the United States. O b. U.S. investors will earn a higher rate of return when using covered interest arbitrage than what they would earn in the United States. O c. British investors who invest in the United Kingdom will achieve the same return as U.S. investors who invest in the United States. O d. U.S. investors will earn 15 percent whether they use covered interest arbitrage or invest in the United States.
QUESTION 3 sdenoted by GBP/USD and reflects the price of one Pound in Dollars. Search for the current GBP/USD exchange rate The U.S. Dollar-British Pound exchange rate and select a correct statement among the options below O A. Pound is a less expensive currency than Dollar O B. Pound is a more expensive currency than Dollar O C. Pound has always been less expensive than Dollar in the last 5 years O D. If GBP/USD falls, British goods would be more expensive for American consumers
True or False: If the dollar depreciates relative to the Japanese yen, the dollar price of a Japanese camera produced by Nikon becomes less expensive for Americans. O True False
How will an increase in tourist arrivals affect the market for foreign exchange? Select one: Inward shift of the demand curve; real exchange rate rises O a. Ob. Outward shift of the demand curve; real exchange rate rises. Oc Inward shift of the supply curve; real exchange rate rises. Od. Outward shift of the supply curve, real exchange rate falls O e. Inward shift of the demand curve; real exchange rate falls.
Question 10 a b and c Assume that there is a free-floating exchange rate. Will the following cause sterling toappreciate or depreciate relative to other currencies? In each case, you should considerwhether there is a shift in the demand or supply curves of sterling (or both) and whichway the curve(s) shift(s). You may assume that the impacts are ceteris paribus, that is,everything else remains the same. Illustrate your answers and give a short explanation interms of currency supply and demand. (a) UK imports increase. (b) UK interest rates rise relative to those abroad.(c) The UK experiences lower inflation than other countries, but with no change in interestrates.
A5
Another name for the equilibrium exchange rate reported in the currency markets is the spot quote break even point forward quote hurdle rate
A car costs $20,000 in the U.S. The exchange rate between the euro and the dollar is 0.813 euros per dollar. Ignoring transportation and other similar costs, what would be the euro price of the same car in France? Select one: O a. 28,000 euros O b. 16,260 euros O c. 24,600 euros O d. 15,300 euros Check
How will an increase in tourist arrivals affect the market for foreign exchange? Select one: O a. Inward shift of the demand curve; real exchange rate falls. O b. Outward shift of the supply curve, real exchange rate falls O . Inward shift of the demand curve; real exchange rate rises O d. Outward shift of the demand curve; real exchange rate rises. O e. Inward shift of the supply curve; real exchange rate rises.
If Italian demand for Canadian lumber decreases, the supply of Canadian dollars to the foreign-exchange market will and the demand for euros will therefore O A. remain the same; remain the same O B. increase; decrease O C. increase; remain the same O D. decrease; increase O E. decrease; decrease
41 Suppose the Euro substantially depreciates against the Jopanese yen. The change in the exchange rate sut of Select one: O a will tend to weaken the competitive position of import-competing European car makers. O b. None of them. O c. will tend to strengthen the competitive position of import-competing European car makers, O d will tend to strengthen the competitive position of Japanese cor makers at the expense of European car makers.