On the foreign exchange market, an increase in a country's exchange rateO a.decreases the demand for its currency and shifts the demand curve leftward.O b. decreases the quantity demanded of its currency and leads to a movement up along the demand curve.decreases the demand for its currency and shifts the demand curve rightward.O d. increases the quantity demanded of its currency and leads to a movement down along the demand curve.O .increases the quantity demanded of its currency and leads to a movement up along the demand curve.

When any foreign currency appreciates in the home country the demand for it will decrease and there…

On the foreign exchange market, an increase in a country's exchange rate O a. decreases the demand for its currency and shifts the demand curve leftward. O b. decreases the quantity demanded of its currency and leads to a movement up along the demand curve. O C. decreases the demand for its currency and shifts the demand curve rightward. O d. increases the quantity demanded of its currency and leads to a movement down along the demand curve. O e. increases the quantity demanded of its currency and leads to a movement up along the demand curve.

On the foreign exchange market, an increase in a country's exchange rate O a. decreases the demand for its currency and shifts the demand curve leftward. O b. decreases the quantity demanded of its currency and leads to a movement up along the demand curve. O C. decreases the demand for its currency and shifts the demand curve rightward. O d. increases the quantity demanded of its currency and leads to a movement down along the demand curve. O e. increases the quantity demanded of its currency and leads to a movement up along the demand curve.

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

If the U.S. interest rate falls relative to other countries' interest rates, then the exchange rate O a. rises only if it was the foreign interest rate that changed. O b. falls only if it was the U.S. interest rate that changed. O c. definitely rises. O d. definitely falls. O e. does not change.
Suppose that Great Britain and the United States are trading partners. Assume that the initial exchange rate in Great Britain is £0.76= 1$. Now suppose that the opportunity cost of consumption in the United States begin to rise. Which of the following explain what is expected to happen in the British forex market? O The demand for British pounds will decrease, leading to a depreciation of the US dollar. O The supply of British pounds will increase, leading to an appreciation of the British pound. O The supply of American dollars will decrease, leading to a depreciation of the British pound. O The demand for American dollars will decrease, leading to an appreciation of the British pound. Please do fast ASAP fast
Qus 2
What does it mean to describe the foreign-exchange market as an "over-the-counter market"? O A. The market consists of customers buying and selling in the foreign-exchange market directly. O B. The market consists of market makers linked together by computers. OC. The market consists of customers linked together by computers. O D. The market is a physical place where currencies are traded.
If one Canadian dollar buys US$0.85, and one Euro buys US$1.20, then one Euro should buy O a. C$1.02 O b. C$1.41 O c. C$2 O d. C$1.64
In the foreign exchange market, an increase in the U.S. interest rate leads to in the exchange rate because the supply of dollars a fall; increases O b. no change; does not change Ос a rise; decreases O d. a rise; increases O . a fall; decreases
If Canadian exports of goods and services were $37 billion, imports of goods and services were $42 billion, transfers by Canadians to foreigners were $3 billion and transfers from foreigners to Canadian citizens were $2 billion, then the current account balance would be O A. $4 billion. O B. - $6 billion. O C. $8 billion O D. $6 billion. O E. - $4 billion.
The capital-service account is the section of the account that records the a. Current; income paid to foreign owners of assets in Canada and income received by Canadians for assets located abroad. O b. Capitalt; the foreign-exchange reserves held by the Bank of Canada. O c. Current; the interest charges and earnings of Canadian importers and exporters. O d. Current; the financial reserves held by the Bank of Canada which they can use in the foreign-exchange market. e. Capital; the net change in Canadian investments abroad and the net change in foreign investments in Canada.
Suppose that the euro is trading at $1.10 per euro in the foreign exchange market. Next, suppose that the exchange rate falls to $0.73 per euro, due to falling Interest rates In the eurozone. The followIng graph shows the supply and demand curves for dollars In the forelgn exchange market. On the following grah, shift ether the supply curve for dollars or the demand curve for dollars to reflect the tnfluence of "carry trade" (In isolation from other factors that may affect the exchange rate) on the exchange rate for dollars. (Hint: Carefully consider whtch price is measured on the vertical axts and which currency Is being measared on the hortzontal axis.) O dalas Dalas QUANTITY (dolars) PRICE OF DOLLARS (euros per dollar)
If Greece resumed the drachma and you wanted to forecast future exchange rates of the euro in Germany (or elsewhere in the EU) against it, which theory suggests that forecasts of relative inflation rates in the two countries can be used to estimate the future exchange rate of the drachma to the euro? O a. Big Mac Index b. Purchasing power parity (PPP) O c. Law of one price O d. Interest rate parity (IRP)
You observe the following exchange rates Spot GBP/EUR exchange rate 1.120 € per £ 3 month GBP/EUR forward rate 1.115 Which of the following statements is likely to be true? Select one: O a. Neither of the other options O b. UK interest rates are lower than Eurozone interest rates O c. Speculators are expecting GBP to depreciate against EUR for the next year. d. UK interest rates arhigher than Eurozone interest rates. O e. Speculators are expecting GBP to appreciate against EUR for the next year.
QUESTION 2 In the long run, an increase in the nominal exchange rate is likely to lead to Note: Multiple answers are possible. O A. an increase in exports ) B. a decrease in exports C. an increase in imports D. a decrease in imports