**Question 1**In the short run, an increase in the nominal exchange rate will _____ net exports.- A. increase- B. decrease- C. not changeIn this question, you are asked to determine the effect of an increase in the nominal exchange rate on net exports. Select the most appropriate option based on your knowledge of exchange rates and international trade.

The nominal exchange rate refers to the number of units of the domestic currency that can buy one…

Answered: QUESTION 1 In the short run, an…

QUESTION 1 In the short run, an increase in the nominal exchange rate will OA. increase net exports B. decrease OC. not change

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: 3. Find Current Account Balance from the following: Items (i) Export of goods (ii) Export of…

A: Current account is the account which can calculate the value of exports and imports of goods and…

Q: A tax incentive that increases the investment Appreciates the real exchange rate Increases the real…

A: The correct answer is:D) Both a and bA tax incentive that increases investment can have dual…

Q: 1. The nominal exchange rate for 1$USD is 6.87CNY, a cheeseburger in the US is $1.60USD, and 11CNY…

A: The Real exchange rate (RER) of two currencies is the result of multiplying the nominal exchange…

Q: Considering the foreign exchange market, identify at least THREE causes for a decrease in the demand…

A: The foreign currency market refers to the market where the currencies of nations is exchanged. The…

Q: 20. According to the theory of uncovered interest parity, which of the following variables does not…

A: Uncovered interest rate parity is the basic measure that determines the correlation between foreign…

Q: If the foreign interest rate increases________? Group of answer choices 1The exchange rate is…

A: Foreign interest rate- It might have a positive or negative effect on foreign bonds or other assets…

Q: 21. After the August 2019 primary elections in Argentina, foreign investors perceived increased…

A: Exchange rate is the rate at which one country's currency is exchanged for other country's currency.…

Q: A tax incentive that increases the investment Appreciates the real exchange rate Increases the real…

A: A tax incentive is designed to incentivize or encourage a particular economic activity by reducing…

Q: Foreign Currency Brazilian real (BRL) Canadian dollar (CAD) Euro (EUR) Japanese yen (JPY) Mexican…

A: Exchange rate:Currency depreciation is the loss of worth of a currency in terms of another currency,…

Q: If the foreign interest rate increases and U.S. interest rates also increases_______? Group of…

A: If the foreign interest rate increases and U.S. interest rates also increases the exchange rate…

Q: A Japanese bicycle costs 10,000 Yen. The $/Yen exchange rate is $.01/1 yen. What is the US dollar…

A: The price of a country's money in relation to the money of another country is referred to as the…

Q: If there is a fixed-exchange-rate system, then in the long run: a. the nominal exchange rate is…

A: A fixed-exchange-rate system is a monetary arrangement in which a country's currency is pegged to…

Q: The nominal exchange rate is defined as the price of domestic currency in terms of foreign currency…

A: The nominal exchange rate is the amount of domestic currency which is needed to purchase foreign…

Q: Using Diagrams show the impact on a country’s exchange rate when: a. Rise in the domestic price of…

A: a. Rise in the domestic price of exports will increase the export as they are getting higher prices.…

Q: 5. In a floating exchange rate regime between Japan and the U.S, what happens to the dollar in the…

A: Floating exchange rates imply that monetary standards change in relative worth constantly. For…

Q: In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is the…

A: Exchange Rate: Exchange rates are the cost of one currency when compared to another. Either fixed or…

Q: QUESTION 8 Covered interest rate parity differs from uncovered interest rate parity in the following…

A: A theoretical situation in which the relationship between interest rates and the spot and future…

Q: n exchange-rate system in which the nominal exchange rate is set by the government is known as a.…

A: Exchange rate is the value of one currency when expressed in terms of other currency. When the…

Q: According to the UIP condition ... Select one: a. ... any differential between the domestic interest…

A: UIP( Uncovered interest rate) Since the work of Fama, economists working in international finance…

Q: In the Mundell-Fleming model with a floating exchange rate, what happens to the following variables…

A: Mundell-Fleming model is an extension of IS-LM model. IS-LM model represents the equilibrium economy…

Q: Which of the following appears to be a safe assumption when there is no difference between the…

A: The rate at which one currency of one nation may be exchanged for another is known as the exchange…

Q: A. more expensive relative to foreign goods, which makes exports fall and imports rise. B. less…

A: The real exchange rate refers to the rate at which one unit of good is exchanged for goods of…

Q: Someone please solve this macro economic question for me In the open-economy macroeconomic model,…

A: *Answer:

Q: If the real exchange rate between Turkish lira and U.S. dollar is 3.50, the price level in Turkey is…

A: Real exchange rate = Nominal exchange rate * Price level in domestic country/price level in a…

Q: A. Explain how nominal exchange rate affects real exchange rate. B. Suppose that a chocolate bar…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: An appreciation of the domestic currency relative to a foreign currency will: A. Make domestic…

A: The question revolves around the impact of a domestic currency appreciation relative to a foreign…

Q: Credjt entries in the U.S. balance of payments A resule from foreign sales of US. goods and…

A: The balance of payment account refers to a statement which is used to record all the international…

Q: The current exchange rate between Brazil Real and the U.S. dollar is R3.30/dollar. Ignore tariff and…

A: As exchange rates are defined as the amount which one currency in exchange of other currency. 3.30…

Q: When the exchange rate for a currency rises and becomes stronger, we say that the currency's value…

A: When a currency appreciates, it means it increased in value relative to a different currency;…

Q: Which of the following would be included in the financial account of the U.S. balance of payments?…

A: The financial account, also known as the financial account of the balance of payments, is a…

Q: The nominal exchange rate for yen to dollars is 200.30 and the PPP is 167.8. Work out the real…

A: The real exchange rate is a measure of the relative prices of goods and services between two…

Q: rise and the real exchange rate depreciates.

A: Explanation When a rise in government expenditure or a decrease in government income will increase…

Q: If U.S. net exports are negative, then net capital outflow is A. negative, so American…

A: The objective of the question is to understand the relationship between net exports and net capital…

Q: Consider the following data from the UK's national accounts in 2015. What is the UK's current…

A: The current account is one-half of the balance of payments, the other half being the capital…

Q: Suppose that the real exchange rate between Canada and Tanzania is defined in terms of baskets of…

A: This can be described as a concept that shows an increase in the real exchange rate means that a…

Q: In the foreign exchange market in which U.S. dollars are exchanged for Mexican pesos, which of the…

A: This problem focuses on understanding the relationship between demand for the U.S. dollar and its…

Q: "In a small open economy with perfect capital mobility, if the government implements a fiscal…

A: When the government implements a fiscal expansion policy, it typically involves increased government…

Question

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

Someone answer this question asapIf the Canadian nominal exchange rate does not change, but prices rise faster in Canada than in all other countries, then the Canadian real exchange rate A. does not change. B. rises. C. declines. D. There is not enough information to answer the question.
1. A. Explain how nominal exchange rate affects real exchange rate.B. Suppose that a chocolate bar costs 20 euros in France and 30 Singaporean dollars inSingapore. If the exchange rate is 1.20 euros per Singaporean dollars, What is the realexchange rate?2. Suppose the economy is in recession. Policymakers estimate that aggregate demand is$100 billion short of the amount necessary to generate the long run natural rate of output.That is, if aggregate demand were shifted to the right by $100 billion, the economy wouldbe in long run equilibrium.a. Explain the impact on the economy if the government chooses to use fiscal policy tostabilize the economy and the marginal propensity to consume (MPC) is given as0.75 with no crowding out.b. If there is a crowding out effect and investment is very sensitive to changes in theinterest rate, should the government increase spending more or less than this amount?3. Suppose, OPEC decides to cut down oil production, causing oil price to go up.a. Explain…
When the domestic currency strengthens under a fixed-exchange-rate system, this is called a. a devaluation. b. a revaluation. c. a depreciation. d. an appreciation.
explain please The value of the Russian Ruble changed from 94 to the dollar to 91 to the dollar. What is the likely effect ofthis change in the foreign exchange market?A. It will make Russia’s imports cheaper but may harm its export competitiveness.B. It will boost Russia’s exports, making them more competitive.C. It will have no impact on trade, as exchange rates do not influence international commerce.D. It will encourage capital outflows and discourage foreign investment.
Don't answer by pen paper and don't use chatgpt otherwise we will give dounvote
QUESTION 3 In the real exchange rate equation shown below, an increase in the U.S. price level means: Pus re = e x Da. It will take more Japanese good to buy a unit of U.S. goods. Ob. The real value of the yen has fallen. Oc. The real exchange rate increases. d. All of the above.
What is the difference between the balance of trade and the balance of payments? Multiple Choice O The balance of trade is only part of the balance of payments. The balance of payments is only part of the balance of trade. The two are different parts of the balance of merchandise accounts. The two are different parts of the balance of financial and capital accounts.
Why would a country want to impose an exchange rate ceiling? a. A strong currency encourages imports and can be used to fight inflation. b. A strong currency stimulates an economy. c. A weak currency encourages imports and can be used to fight inflation. d. A weak currency will encourage exports and stimulate the economy.
What is happening to the Pakistani real exchange rate in each of the following situations? Explain. a. The Pakistani nominal exchange rate is unchanged, but prices rise faster in Pakistan than abroad. b. The Pakistani nominal exchange rate is unchanged, but prices rise faster abroad than in the Pakistan. c. The Pakistani nominal exchange rate declines, and prices are unchanged in the Pakistan and abroad. d. The Pakistani nominal exchange rate declines, and prices rise faster abroad than in the Pakistan?
The advantage of a system of fixed exchange rates over one where exchange rates are flexible is that a. floating exchange rates impose risks on importers and exporters from unpredictable exchange rates. b. fiscal and monetary policy can focus more on domestic conditions. c. exchange controls become unnecessary. d. the government gains more control over the economy.
.
The current account includes changes in a. net exports, net foreign investment income, and import transfers. b. net flows of goods and changes private consumption spending. c. net transfers of non-financial assets and flows of goods and income. d. net foreign investment income, net exports, and net transfers. e. net transfers, net derivatives, and net investment income.