Suppose market participants expect the krona to depreciate relative to the dollar. In the following graph, shift the supply curve, the demand curve, or both to illustrate the effects of the expectations described. PRICE (dollars per krona) O. True QUANTITY (krona) O False D 0 True or False: The expectation that the krona would depreciate actually caused the krona to appreciate. S

Suppose market participants expect the krona to depreciate relative to the dollar. In the following graph, shift the supply curve, the demand curve, or both to illustrate the effects of the expectations described. PRICE (dollars per krona) O. True QUANTITY (krona) O False D 0 True or False: The expectation that the krona would depreciate actually caused the krona to appreciate. S

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Economics Assume that global warming and abnomally high temperatures in Northem California have rendered it impossible for wine grapes in the Napa Valley (and all over California) to grow properly. Unable to get Califormia wines, demand jumps dramatically for Australian wines. This would cause: O an increase in the demand for the Australian dollar. O a decrease in the demand for the Australian dollar. O a decrease in the supply af u.S. dallars. O an increase in the demand for U.S. dollers. What happens if Eurapean economies begin having a seriaus bout of stagflation? O The dollar becomes stronger In terms of the euro. O The real exchange rate between the euro and the dollar inarcases. O The eurp becomes stronger in terms af dollars. O The nominal exchange rate between the euro and the dollar increases.
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2. Based on the IS-LM-PC model for a closed economy studied in class, which of the following statements is correct? a) In the medium run monetary policy can only be used to control inflation, but it will not affect production. b) In the medium run, fiscal policy can only help to increase or decrease interest rates, but it will not affect production. c) Both monetary and fiscal policy can't be effectively uscd to increase production in the short run. d) All of the above.
25.Foraign exchange dealers expect the Canadian dollar next year to depreciate against all currencies. What is the effect on the quantity of real GDP demanded or aggregate demand in Canada? A. There is no change to either the quantity of real GDP demanded or to aggregate demand. В. Canadian aggregate demand increases. С. Canadian aggregate demand decreases. D. The quantity of Canadian real GDP demanded decreases. E. The quantity of Canadian real GDP demanded increases.
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When the Fed raises the federal funds rate, the US dollar and net exports O a. appreciates; decreases O b. does not change; decreases Oc does not change; does not change d. appreciates; increases O e. depreciates; decreases
6. Individual Problems 11-7 Suppose market participants expect the krona to appreciate relative to the dollar. In the following graph, shift the supply curve, the demand curve, or both to illustrate the effects of the expectations described. DSPRICE (dollars per krona)QUANTITY (krona)D S True or False: The expectation that the krona would appreciate helped the krona to appreciate. True False
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