None Refer to Figure 3 for the following question. Which of the following events cause theshifts in the supply and demand curves in the market for dollars against the Britishpound shown in the graph above?Figure 3Exchangerate (£/S)£0.500.46A) interest rates rise in EnglandShow Transcribed TextFigure 3Exchangerate (S/S)£0.500.46A) interest rates rise in EnglandB) interest rates rise in AustraliaC) real income rises in AustraliaD) real income falls in EnglandQuantity ofdollars traded0c$2D₂Quantity ofdollars traded

Below is the anasis of the choices:A) Interest rates rise in England: An increase in interest rates…

Answered: Refer to Figure 3 for the following…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 5PA

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3. Toyota manufactures most of the vehicles it sells in the United Kingdom in Japan. The baseplatform for the Toyota Tundra truck line is X1,650,000. The spot rate of the Japanese yen againstthe British pound has recently moved from X197/E to X190/E. How does this change the price of theTundra to Toyota's British subsidiary in British pounds?
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Suppose that the Bank of Canada sells 100 million euros from its foreign exchange reserves, and that the exchange rate is $1.50 Canadian per euro. The Canadian money supply will O Fall by $100 million O Fall by $150 million O Rise by $160 million O Rise by $16 million Now suppose that the Bank of Canada does not want the money supply to change. What would it need to do to sterilize its foreign exchange market operation? O Buy Canadian government bonds O Sell more from its foreign exchange reserves O Buy foreign government bonds Save & Continue
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Assume that Eurodollar deposit offer a rate of return of 10% while dollar deposit in US Bank offer 8% rate of return. What will happen the value of USD against EUR? Make sure that you use demand supply diagram to explain such impact.
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)
Refer to the following list, and explain who will be buying Canadian dollars and who will be selling. a) a Canadian businesswoman visiting Japan The Canadian businesswoman will be selling vCanadian dollars to buy Japanese yen b) a Russian tourist visiting Cape Breton The Russian tourist will be (Click to select) v dollars to spend in Cape Breton. c) an American corporation building a new plant in Saskatoon The American corporation will be (Click to select) v Canadian dollars in order to purchase the building in Saskatoon. d) a Canadian bank expanding its operations in the United States The Canadian bank will be (Click to select) v Canadian dollars to buy American dollars to expand its operations in the U.S. (Click to select) selling buying
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You have been hired as a Marco Economist by the President of the United States to help evaluate the recentannouncement by Federal Reserve chairman Ben Bernanke that the FED will be increasing interest rates again.Ben Bernanke has justified the move on the grounds that the economy continues to be strong. Answer thefollowing questions. Provide a graphical explanation for your answers whenever possible What is the effect on the foreign exchangemarket (the $ market)? 8. The exchange rate (the amount of foreigncurrency that a $ buys)?A. increaseB. decreaseC. remains unchanged 9. The U.S. dollar has?A. depreciatedB. appreciatedC. remained unchanged 10. The currency in the other country has?A. depreciatedB. appreciatedC. remained unchanged
Supply Demand Supply Demand QUANTITY (dolars) These fears would cause the demand for dollars to , and the sup ply of dollars to leading to In the euro/dollar exchange rate. PRICE OF DOLLARS (euros per dollar)
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Answer the question according to the graph below. Dollar/euro exchange rate, Ese Ese Dollar return Dollar return 2' Expected euro return Ee Expected euro return 3' 1' Esie Rates of return (in dollar terms) R R L(Rg. Yus) L(Rg. Yus) Mus Pus "us Pis 4 U.S. real money supply 1 Mus Pis Mus Pis US US U.S. real money holdings U.S. real money holdings Assume that the U.S. money supply is initially given at M'us, the price level is initially given at P'us, and the equilibrium exchange rate is initially at E's/e. US, US A permanent increase in the nominal money supply from Mus to M²us in the short-run will result in a new equilibrium at point Lütfen birini seçin: O A. 3' O B. 1' O C. 2' O D. 4'

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