The gold standard isAnswer1. a type of floating exchange rate system.2. a type of managed flexible exchange rate system.3. a type of fixed exchange rate system.4. a purely floating exchange rate system.

Answered: The gold standard is Answer 1. a type…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Country X adopts a fixed exchange rate system. If the return on capital in a foreign country is more attractive than the domestic, show and explain the effect on domestic exchange rates and the value of domestic and foreign currencies with the help of foreign exchange market diagrams.
1. The principal function of the foreign exchange market is the transfer of funds, thus purchasing power, from one nation and currency to another. 2. If it takes 116.57 yen to buy one dollar, it takes $.0085785 to buy one yen. 3. Purchasing-power parity theory postulates that the change in the exchange rate between two currencies is proportional to the change in the ratio in the two countries' general price levels. 4. The price-specie-flow adjustment mechanism operates by the deficit nation losing gold and experiencing a reduction in its money supply. 5. Monetary policy is very effective under a fixed exchange rate policy. True or Falae
Type out the correct answer and give proper explanation of each n every option step by step within 50 minutes . Will give you multiple upvotes only for the correct answer . Thank you . Which of the following situations describe a fixed exchange rate regime? A. the value of the domestic currency falls when the domestic interest rate increases B. falling demand for the domestic currency prompts the central bank to buy the currency C. an increase in exports causes increase in the demand for the domestic currency D. government intervention in the oil market increases the demand for foreign currency
In the Mundell-Fleming model with floating, exchange rates, explain what happens to aggregate income, the exchange rate, and the trade balance when the money supply is reduced. What would happen if exchange rates were fixed rather than floating?
Big Mac costs $5.90 in the US and it costs 560 yen in Japan. The market exchange rate is 100 yen per dollar. What is the Big Mac PPP exchange rate?
How will a stronger euro affect the following economic agents?a. A German exporter to England.b. A Chilean tourist visiting the Netherlands.c. A Canadian bank investing in a Greek government bond.d. A German exporter to France.
If a Japanese car costs 350,000 yen, a similar American car costs $45,000, and a dollar can buy 80 yen, what are the nominal and real exchange rates?
Q3-18 A situation where a country announces a parity value for its currency and permits small variations around that value, but also adjusts the parity regularly by small amounts according to various indicators, is known as Select one: a. a dirty float. b. a crawling peg. c. a managed float strategy of "leaning against the wind." d. a "wider band."
Q2. The inflation rate in Japan is 1% per year, and the inflation rate in Korea is 3% per year. What can you say about the Korean won-Japanese yen exchange rate if purchasing power parity holds? Explain your answer.
Compare and contrast the fixed, freely floating, and managed float exchange rate systems. What are some advantages and disadvantages of a freely floating exchange rate system versus a fixed exchange rate system?
Assume that there is a free-floating exchange rate. Interest rates rise in the UK, relative to those abroad. Discuss the effect that you would expect this to have on exchange rates. You should consider the effect on currency supply and demand, and illustrate your answer with a diagram. You should also consider how this relates to the concept of uncovered interest rate parity, and discuss this with the help of an equation.

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The gold standard is Answer 1. a type of floating exchange rate system. 2. a type of managed flexible exchange rate system. 3. a type of fixed exchange rate system. 4. a purely floating exchange rate system.