QUESTION 5 Using information from problems 3 and 4, suppose that the central bank of Mexico has 200 bln dollars of foreign reserves just before the financial crisis began. If the central bank wants to keep the exchange rate at the level described in problem 4, it can do so for demand curves do not change). weeks before it runs out of reserves (provided supply and Note: Type in your answer rounded to two decimal places, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard may automatically delete it and you should not do anything about it. In case of percentages, do not type in the percentage symbol "%". If your answer is a negative number, type a dash in front of your answer, i.e, "-999.99".

QUESTION 5 Using information from problems 3 and 4, suppose that the central bank of Mexico has 200 bln dollars of foreign reserves just before the financial crisis began. If the central bank wants to keep the exchange rate at the level described in problem 4, it can do so for demand curves do not change). weeks before it runs out of reserves (provided supply and Note: Type in your answer rounded to two decimal places, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard may automatically delete it and you should not do anything about it. In case of percentages, do not type in the percentage symbol "%". If your answer is a negative number, type a dash in front of your answer, i.e, "-999.99".

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

b) Over the last decade, many foreign firms have invested in China and used their Chinese factories to produce goods for export. If the Yuan is allowed to float freely against the U.S.dollar on the foreign exchange markets and appreciates in value, how might this affect the fortunes of those enterprises?
You work for the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce. Your supervisor gives you the following U.S. International Transactions Accounts for the Year 20XX (figures are in billions of dollars) and wants it reported in a coherent fashion in accordance with accepted conventions: Investment income payments (27.3); Export of goods 80.6; Balance of services 5.1; Capital outflow (44.5); Imports of goods (110.9); Change in Official Reserves 2; Investment income receipts 24.7; Capital inflow 73.6; Net unilateral transfers (3.3). (a) He wants you to compute the balances of trade, current account, capital account and statistical discrepancy. (b) He also wants you to find out (based on your calculation) if the U.S. is a net debtor or a net creditor and why
please help me with this question. Thank you please illustrate if needed
(a) What is the Marshall- Lerner condition and what is its relevance? (b) What is the J-Curve effect and how is it related to M-L condition? (c) In this part, you are to RELATE the M-L condition to the shape of the demand and supply of the currency, below. Suppose the foreign exchange market is represented by the following diagram where there are only two countries, Canada and Euro zone, trading goods and services with each other. E cs/E 1.8 DE S€ 1.4 1.0 QO Q€ (D€): demand for euro by Canadians = stands for Canada's payments for its imports of goods and services, and (S€): supply of euro by Europeans = stands for Canada's receipt from its exports of goods and services. For simplicity, there are no capital/financial account transactions. Show that the M-L condition is satisfied in this diagram.
Question 4 State the impact of each of the following changes (other variables remaining unchanged) on the real exchange rate. (a) The Consumer Price Index (which measures the price level) in the United States rises by 4 percent. (b) The Consumer Price Index in Jamaica rises by 9 percent. (c) The two Consumer Price Index changes above occur at the same time.
Assume that a Malaysian commercial bank's bid quote of US dollar (USD) is RM4.1 and ask price is RM4.2. If you have ringgit, what is the amount of ringgit that you need to purchase 100,000 US dollars?
1. Summer1 Digital (Summer1) is a multinational corporation that produces and distributes telecommunications technology. Although its corporate headquarters are located in Kuala Lumpur, Malaysia, Summer1 usually buys its materials in several different countries using several different foreign currencies. The matter is further complicated because Summer1 often sells its products in other foreign countries. Summer1 is concerned with economic conditions that could adversely affect ringgit exchange rates. Explain Malaysias economic conditions in 2021. Evaluate the risks that need to be considered by Summer1 if it decides to continue buying materials from other countries including China and Indonesia as well as selling its products in countries such as Hong Kong and Japan. Discuss ways to manage and minimise the impacts of the risks associated with Techno1’s materials purchase and products sales in the foreign countries.
Question 4 Ruggerman bank expects that the Mexican peso will depreciate against US dollar from it is spot rate of $0.44 to $0.43 in 30 days. The following interbank lending and borrowing rates: Currency U.S Dollar Lending Rate Borrowing Rate 8.40% 9.6 % Mexican peso 24.0% 22.0% Assume that Ruggerman has a borrowing capacity of MXP15 million in the interbank market. Show the steps and calculate the profit could be generated from this strategy.
esources Assume the following: (1) the interest rate on six-month treasury bills is 8 percent per annum in the United Kingdom and 4 percent per annum in the United States; (2) today's spot price of the pound is $1.50, while the six-month forward price of the pound is $1.485. If the price of the six-month forward pound were to then U.S. investors would no longer earn an extra return by shifting funds to the United Kingdom. O rise to $1.52 O rise to $1.55 O fall to $1.40 O fall to $1.47
A5)
Based on the latest statistics published by Bank Negara Malaysia, Ringgit Malaysia has depreciated by 4.9% against US dollar during the first quarter of year 2020. Explain how the currency depreciation will affect export, import and the balance of trade of the country.
129.) Currency (C) = 800 Reserves (R) = 400 Deposits (D) = 1600 What is the value of the reserve-deposit ratio? 0.2 0.25 0.4 0.5