The questions in this part are based on Exchange Rates in the SARB Quarterly.Bulletin, March 2022, S-112.In 2021 the rand appreciated against the Brazilian Real, Chinese Yuan, EU Euro, UKPound and US Dollar.OTrueOFalseIn June 2021 the rand/Japanese yen wasIn 2020 the Rand/Euro exchange rate wascents (3 decimal places)cents (2 decimal places)against the Euro and compared to AprilIn May 2021 the South African rand.2021.OappreciatedOdepreciated

False: In 2021, the South African Rand actually depreciated against these currencies, not…

Answered: The questions in this part are based on…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 8PA

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Many developing countries, like Mexico, have moderate to high rates of inflation. At the same time, international trade plays an Important role In their economies. What type of exchange rate regime would be best for such a countrys currency vis Ă´ vis the U.S. dollar?
When there is an increase in the value of the EuropeanUnion’s euro, all else equal, how will American businessesbe affected? What will happen when there is a decrease inthe value of the American dollar relative to the Japaneseyen, given all else is equal?
In 2015, a letter to a Canadian national newspaper argued that "the economy of this once wonderful country is in the sewer and the politicians keep on tinkering, not knowing how to fix it." The letter proposed a 20-percent depreciation of the Canadian dollar and argued that the immediate effects would be (among other things) o a dramatic rise in exports o a dramatic fall in imports 。 a large net inflow of new foreign investment. a. What could the Bank of Canada do to generate a 20-percent depreciation of the Canadian dollar? The Bank of Canada would have to ○ A. lower the pattern of Canadian inflation relative to average world inflation. B. enter the foreign-exchange market and sell amounts of foreign exchange determined by market. C. enter the foreign-exchange market and continue to buy massive amounts of foreign exchange. OD. make no transactions adjusting the exchange rate to clear the foreign-exchange market. b. Would the action necessary in part (a) be consistent with the Bank's…
United Arab Emirates 14.75 3.6731 Argentina 171 60.0656 Australia 6.45 1.449065353 Azerbaijan 3.95 1.6965 Bahrain 1.4 0.377 Brazil 19.9 4.1419 The table contains the price of a BigMac in a variety o fcountries. The table also contains exchange rates relative to the US dollar. Assume the United Kingdom is the home country. a. Assuming that purchasing power parity, (i.e. law of one price) holds, calculate the ex-change rate implied/predicted by PPP for each country. b. Which currency is the most undervalued and most overvalued relative to the BritishPound?
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Country Currency Currency per Canadian Dollar Canadian Price Index Country Price Index Bolivia Boliviano 8.00 700 Japan Yen 125.00 25,000 Morocco Dinar 10.00 1200 Norway Kroner 6.5 650 Thailand Bant 40.00 4000 Refer to Table 12-1. What currency(ies) is (are) less valuable than predicted by the purchasing-power parity theory? the baht and kroner the yen the yen and kroner 100 100 100 100 100 the boliviano

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