The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that Japan puts quotas on all U.S. imports. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scena ? PRICE (Yen per dollar) S D QUANTITY OF DOLLARS (Millions per day) If Japan puts quotas on all U.S. imports, the U.S. dollar 604.
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- The following graph shows the market for euros in terms of dollars. The market is initially in equilibrium at $2.00 per euro and 8 billion euros. Suppose an economic downturn in the United States leads to a drop in American incomes, causing imports from Europe to decline. On the following graph, show the effect in the market for euros of an economic downturn in the United States that leads to a drop in European incomes. DOLLAR PRICE OF EUROS 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 Supply of Euros Demand for Euros 4 6 8 10 12 QUANTITY OF EUROS (Billions of euros) 14 Under a system of flexible exchange rates, the dollar will per euro. 16 Increase income taxes in the United States. Lower interest rates by way of monetary policy. Demand for Euros Subsidize the production of certain U.S. exports to Europe. Supply of Euros ? Now suppose that the United States maintains a fixed exchange rate of $2.00 per euro. Which of the following U.S. government policies would keep the balance-of-payments…The following graph shows the market for euros in terms of dollars. The market is initially in equilibrium at $1.00 per euro and 4 billion euros. Suppose an economic downturn in the United States leads to a drop in American incomes, causing imports from Europe to decline. On the following graph, show the effect in the market for euros of an economic downturn in the United States that leads to a drop in European incomes. DOLLAR PRICE OF EUROS 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0 0 1 Supply of Euros D₂ D₁ 2 3 4 5 6 QUANTITY OF EUROS (Billions of euros) 7 8 Under a system of flexible exchange rates, the dollar will depreciate $1.25 per euro. Sell dollars for euros in the foreign exchange market. Lower interest rates by way of monetary policy. Demand for Euros Subsidize the production of certain U.S. exports to Europe. Supply of Euros ? Now suppose that the United States maintains a fixed exchange rate of $1.00 per euro. Which of the following U.S. government policies would keep the…An expected decline in demand for consumer goods in the U.S. means there will be less imports into the U.S. Less imports in the U.S. translates to a reduction in exports from China, which is significant as the U.S. has the largest GDP of all nations. As the U.S. is reducing imports, it will be purchasing less goods from China, which means the U.S. will be giving up less dollars to purchase Chinese goods with the yuan. Will a decline in demand for consumer goods in the U.S. impact China's economy given the above information? If so, how would that affect the dollar-yuan exchange rate?
- The purpose of this assignment is to become familiar with the terms import and export, and then discuss advantages or disadvantages of buying imports versus buying domestic products. You could, for instance, write about an imported automobile, stereo, or household appliance that you bought or considered buying. Include all of the following points in your discussion: 1. If you were a retailer, would you want to sell domestically made goods or imported items? Please explain why you made this choice. 2. If you wanted to sell a good or service to customers in other countries, what sorts of items do you think you could export? 3. In your opinion, should the United States' Federal Government support companies that want to enter export markets? Please explain.A semiconductor is a key component in your laptop, cell phone, and iPod. The table provides information about the market for semiconductors in the United States. Producers of semiconductors can get $18 a unit on the world market. Due to loss of competitiveness brought on by appreciation of the exchange rate and the high production costs, U.S. government reduce the export (or limit the supply of domestic producers) by imposing an export quota of 20 billion units per year. What happens to U.S. price of semiconductors, the quantity of semiconductors bought by U.S. people, and the quantity of semiconductors exported? [hint: use equation to calculate the equilibrium]Assume that the United States, as a steel-importing nation, is large enough so that changes in the quantity of its imports influence the world price of steel. The following table shows the U.S. supply and demand schedules for steel, along with the overall amount of steel supplied to U.S. consumers by domestic and foreign producers. Price Quantity Supplied (Dollars per ton) (Domestic) (Domestic plus Imports) Quantity Demanded 100 0 0 15 200 4 14 300 8 13 400 12 12 500 16 11 600 20 10 700 5 24 9 Using the data in the table, use the blue points (circle symbol) to plot the demand curve and use the orange points (square symbol) to plot the supply curve (domestic plus imports) on the following graph. Then use the black cross to indicate the equilibrium price and quantity. BOO -O Demand -P Supply us free trade + Equilibrium Free trade 4 Supply wond wit Equilibrium PRICE (Dollars per fon) 700 600 500 400 300 200 100+ 0 6 0 1 2 3 4 10 12 14 16 18 20 22 24 0 2 4 QUANTITY (Tons of steel) With…
- PRICE (Yen per dollar) 9. Study Questions and Problems #9 The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that real interest rates in the United States rise. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scenario. D QUANTITY OF DOLLARS (Millions per day) S D If real interest rates in the United States rise, the U.S. dollar S ?Suppose the fixed exchange rate is $0.50 per mark. Suppose that a recession in the United States leads to a reduction in imports from Germany. On the following graph, shift the relevant curve or curves to illustrate the described changes. Then use the black points (cross symbol) to indicate the imbalance. 1.00 Supply for marks Demand for marks 0.75 Supply for marks 0.50 The Imbalance 0.25 Demand for marks 4 12 16 QUANTITY OF MARKS (Millions) A recession in the United States leads to a reduction in imports from Germany. As a result, the demand for German marks causing a million imbalance in the U.S. balance of payments. Under the gold standard, how is the fixed exchange rate maintained in the face of the balance-of-payments imbalance shown on the previous graph? The IMF must lend marks to the United States with which to buy dollars. The IMF must lend dollars to Germany with which to buy marks. Gold must flow from the United States to Germany. o Gold must flow from Germany to the United…In our pretend world there are two countries - Chile and Switzerland - that are engaged in trade. The firm Switzerland Chocolates Express sells Boxes of chocolate (a good) in Chile. Each Box of Chocolates sells for 6500 Chilean pesos in Chile. In Switzerland, each box of chocolates 11 Swiss Franc to produce. Assume that the firm has 1 million boxes of chocolate to sell. How much money (in Swiss Franc) would the firm make (or lose) on the sale at the following exchange rates: Rate 1: 550 Pesos per Swiss Franc Rate 2: 0.0015 Swiss Franc Per Chilean Peso
- Indicate how each of the following transactions affects U.S. exports, imports, and net exports. Transaction Effect On... U.S. Exports U.S. Imports U.S. Net Exports A British scholar spends a year at Harvard University as a visiting scholar. Hundreds of people in London queue outside Apple stores to buy new iPhones. Your uncle buys a new Volvo. Your aunt buys a novel by a British author from a local bookstore. A European family goes to Disney World in Florida for vacation.Suppose you independently contract as a software developer living in the United States, and you just sold a license for your latest program to a Belgian consumer for EUR 5,000. Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "0" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Exports Imports Net Exports Direction of Change Magnitude of Change (Euros) in U.S. net exports is matched by in U.S. net capital Because of the identity equation that relates to net exports, the outflow. Which of the following is an example of how the United States' net capital outflow might be affected in this scenario? Check all that apply. You store the euros in your safety deposit box at home. You purchase EUR 5,000 worth of stock in a Belgian corporation. You buy EUR 5,000 worth of…Price of Clothing 6. Imports and Exports When China's clothing industry expands, the increase in world supply lowers the world price of clothing. Consider the effects this has on both an importer and an exporter of clothing. Suppose the following graph represents the market for clothing in Cambodia prior to the expansion of China's clothing industry. Cambodia is an of clothing because the world price is the domestic equilibrium price. Note: You will have to use green points (triangle symbol) and purple points (diamond symbol) to shade the consumer and producer surplus areas on the following graphs. There are two green points and two purple points per graph. Use either one point of both to most accurately indicate the areas. For example, if indicating the consumer surplus requires only one green point, leave the second one on the palette. Use the green point (triangle symbol) to shade consumer surplus in Cambodia before China's clothing industry expands. Then use the purple point…