Refer to the following table, in which Qd is the quantity of loonies demanded, Pis the dollar price of loonies, Q5 is the quantity of loonies supplied in year 1, and Qs'is the quantity of loonies supplied in year 2. All quantities are in billions. Assume the exchange rate is fixed against the dollar at 135 dollars = 1 loonie. P 150 145 140 135 Qd 320 480 640 800 billion loonies Qs 960 800 640 480 Instructions: Enter your answer as a whole number. a. In year 1, what would be the minimum initial size of the U.S. reserve of loonies such that it could maintain the peg throughout the year? Qs' 640 480 320 160 billion loonies b. What about the minimum initial size that would be necessary at the start of year 2?

Refer to the following table, in which Qd is the quantity of loonies demanded, Pis the dollar price of loonies, Q5 is the quantity of loonies supplied in year 1, and Qs'is the quantity of loonies supplied in year 2. All quantities are in billions. Assume the exchange rate is fixed against the dollar at 135 dollars = 1 loonie. P 150 145 140 135 Qd 320 480 640 800 billion loonies Qs 960 800 640 480 Instructions: Enter your answer as a whole number. a. In year 1, what would be the minimum initial size of the U.S. reserve of loonies such that it could maintain the peg throughout the year? Qs' 640 480 320 160 billion loonies b. What about the minimum initial size that would be necessary at the start of year 2?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Only typed answer and please answer correctly

Next, consider only the data for year 1.
c. What peg should the United States set if it wants the fixed exchange rate to increase the domestic money supply by $46.4 trillion?
dollars per loonie

Refer to the following table, in which Qd is the quantity of loonies demanded, Pis the dollar price of loonies, Qs is the quantity of
loonies supplied in year 1, and Qg'is the quantity of loonies supplied in year 2. All quantities are in billions. Assume the exchange rate
is fixed against the dollar at 135 dollars = 1 loonie.
P
150
145
140
135
Qd
320
480
640
800
billion loonies
Qs
960
800
640
480
Instructions: Enter your answer as a whole number.
a. In year 1, what would be the minimum initial size of the U.S. reserve of loonies such that it could maintain the peg throughout the
year?
Qs'
640
480
320
160
billion loonies
b. What about the minimum initial size that would be necessary at the start of year 2?

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