the value of the dollar appreciates in value relative to other currencies, this means the dollar becomes "stronger", how are the following groups affected. Please explain your answers. US Importers, hurt or helped? US Exporters, hurt or helped? Will this strengthening of the

the value of the dollar appreciates in value relative to other currencies, this means the dollar becomes "stronger", how are the following groups affected. Please explain your answers. US Importers, hurt or helped? US Exporters, hurt or helped? Will this strengthening of the

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter34: International Finance

Section34.3: Fixed Exchange Rates

Problem 2ST

See similar textbooks

Related questions

Q: Generally, how does the standard of living in the United States today compare to the standard of…

A: Standard of Living Comparison The standard of living in the United States today is generally higher…

Q: If you were a Chinese exporter, what might you have done if you had anticipated the appreciation in…

A: The basic function of the foreign exchange market is to facilitate the conversion of 1 currency into…

Q: In the picture below is the full question. The highlighted one is my guess which is wrong. If the…

A: Appreciation of the U.S. dollar means People of the united states can buy more goods and services…

Q: The nominal exchange rate is the price of one currency in terms of another currency. A nominal…

A: As given in the question the Nominal-exchange-rate(NER) is the price(p) of one currency in terms of…

Q: When the Australian dollar appreciates, we know that, other things equal:the dollar is less…

A: The exchange rate determines the price of the currency of a domestic country when it is exchanged…

Q: International Finance and the Exchange Rate-End of Chapter Problem At a family gathering, one of…

A: The twin deficit scenario occurs when a country experiences both a budget shortfall and a current…

Q: Ad Ad The following question focuses on the exchange rate between Mexican pesos and U.S. dollars,…

A: The value of a country's currency in terms of some other country's currency is reffered to be as…

Q: currency becomes more valuable

A: an exchange rate is the rate at which one national currency will be exchanged for another. In other…

Q: In the following problem, assume that the UK currency is the pound sterling (PST) and the currency…

A: The exchange rate determines the price of the currency of a domestic country when it is exchanged…

Q: The nominal exchange rate is the price of one currency in terms of another currency. A nominal…

A: Exchange rate: Currency depreciation is the loss of worth of a currency in terms of another…

Q: Using the concept of "carry trade," explain how a decrease in U.S. interest rates could affect the…

A: Carry trade is a strategy when the funds are withdrawn from the country with low interest rate and…

Q: Which of the following gives rise to transaction demand for a currency? A Chinese investor buys…

A: Currency is a medium to exchange goods and services.

Q: The figure above illustrates the U.S. foreign exchange market. Illustrate how the exchange rate…

A: The price at which one currency is exchanged for another has an impact on international trade and…

Q: Assuming actors have not yet had time to change their expectations about the future exchange rate,…

A: The supply curve shows the diagrammatic relationship between the price of the good and the quantity…

Q: In 1992, 18.6 million Canadians visited the United States, but only 11.8 million U.S. residents…

A: The ratio of a product's percentage change in quantity demanded to its percentage change in price is…

Q: Which of the following statement are true? The U.S. economy is the largest economy in the world.…

A: Economic growth measures the increase in GDP over period of time comparing one period from another…

Q: Suppose you know that exports for a nation are $24 billion and imports are $25 billion.…

A: Here we calculate and fill the blanks by using the given data , so the calculation of the following…

Q: Which best explains why U.S. businesses want the U.S. dollar to decrease in value against the…

A: The exchange rate measures a currency's value in terms of another. A currency depreciates when its…

Q: f $2.00 U.S. bought $2.35 Canadian dollars in 2002 and in 2005 it bought $2.55 Canadian dollars,…

A: Exchange rate in 2002 = 2.35 Canadian dollars against 2 US dollars Exchange rate in 2005 = 2.55…

Q: As a result of entering the world economy, Neverland experiences economic boom and its GDP goes up…

A: An economy's current account maintains track of its foreign dealings with the rest of the world. All…

Q: The nominal exchange rate is the price of one currency in terms of another currency. A nominal…

A: Exchange rate is the rate at which two national currencies are exchanged and it is determined by…

Q: All of the following are factors that cause supply and demand for currencies to change EXCEPT: A.…

A: Gross domestic product: The total value of goods and services produced within a country' boarders…

Q: A real appreciation means that domestic goods become more expensive relative to foreign goods.…

A: Appreciation and depreciation of a currency refers to the rate at which the currency of one country…

Q: Whether or not one likes a strong U.S. dollar depends on their perspective. For those who are…

A: The foreign exchange market, also called the forex market or FX market, is a decentralized global…

Q: If the dollar depreciates relative to the Japanese yen, how will this affect the dollar price of a…

A: A depreciation of the dollar relative to the yen leads to an increase in the dollar price of…

Q: What impact will an appreciation of the dollar have on the relative price of foreign goods to…

A: If the dollar appreciates, then the exchange rate increases. The relative price of domestic goods…

Q: Consider the following closed economy (i.e., one that does not trade with the rest of the world).…

A: Here, the information about real GDP and the components of aggregate demand is given for a closed…

Q: Explain the theory of purchasing power parity (PPP). Based on this theory, what is a general…

A: Purchasing power parity came from believes of right to exchange for all the individuals at any part…

Q: If the euro appreciates against the US$, it becomes more expensive for Americans to buy European…

A: Appreciation of currency refers to the increment in the value of a currency in exchange for another…

Q: The following figure shows the Current Account Balance (similar to the Trade Balance) of Japan…

A: The balance of payments (BOP) is known to summarize all of the transactions which…

Q: Consider the following open economy. Real GDP 1,000 Consumption 778 Government Expenditures 144…

A: When the economy is in equilibrium, the leakages must be equal to injections. Leakages are taxes,…

Q: The term “Balance of Trade” incorporates the measure of which of the following?Choose one answer.…

A: Balance of trade refers to the component in the international trade records where the transactions…

Q: Suppose world interest rates go up, driving the world into a recession (that is, world income…

A: Aggregate demand (AD): - It is the total demand of goods and services in an economy at a particular…

Q: When the U.S. dollar appreciates, OPTIONS: foreign residents demand fewer of U.S. goods, and U.S.…

A: Answer to the question is as follows :

Q: The Dominican peso started the year at 55 pesos / $1, but then fell to 50 pesos / $1 over the…

A: Exchange rate fluctuations, whether due to appreciation or depreciation, may have a big impact on a…

Q: China is one of the U.S.’s most important trading partners. (Consider how many goods are “Made in…

A: If China experiences inflation, then the value of the Chinese Yuan will rise but the US Dollar will…

Q: Which group will most likely be negatively affected if the U.S. dollar drops in value against the…

A: If the U.S. dollar drops in value against the British pound, then the British pound will get strong…

Q: Show an effect of a sale of dollars and a purchase of foreign assets (unsterilized intervention).…

A: The term unsterilized foreign exchange intervention implies to how a country's monetary authorities…

Q: Suppose that the Japanese yen rises against the U.S. dollar-that is, it will take more dollars to…

A: The rate at which one currency can be exchanged for another is termed exchange rate (ER). It…

Q: How can a surge in exports and decrease in imports cause an increase in aggregate demand and what…

A: Aggregate demand is defined as the total demand of all final commodities and services at a given…

Q: Explain very briefly about elasticity approach , national income approach , absorption approach ,…

A: The balance of payments is a system used by countries to keep track of all foreign monetary…

Q: Are the statements below true or false? Briefly explain why you have chosen your answer…

A: As economies emerged, goods and services were produced that required machinery and labour. For…

Q: The term “Balance of Trade” incorporates the measure of which of the following?Choose one answer.a.…

A: International trade implies the trade that takes place beyond the national boundary. It plays an…

Question

If the value of the dollar appreciates in value relative to other currencies, this means the dollar becomes "stronger", how are the following groups affected. Please explain your answers. US Importers, hurt or helped? US Exporters, hurt or helped? Will this strengthening of the dollar cause GDP to increase or decrease?

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What does it mean when the dollar appreciates compared to when the dollar depreciates? Has the US dollar been relatively strong or weak over the past year? How does the strength of the dollar affect exports and imports?
The difference between the amount we spend to import products from other countries and the amount we make when we export products to other countries is called the balance of trade. Why would the balance of trade affect the value of the US dollar? Is it better to import more or to export more? Why?
When the dollar decreases in value relative to other currencies, which group (exporters/importers) benefits which group(exporters/importers) is potentially harmed?
U.S. goods exports +$ 390 U.S. goods imports - 520 U.S. service exports +145 U.S. service imports -107 Net investment income +12 Net transfers -22 Capital account -5 Foreign purchases of U.S. assets +156 U.S. purchases of foreign assets -49 The accompanying table contains hypothetical data for the U.S. balance of payments in a year. All figures are in billions of dollars. The balance on the financial account was a A. $107 billion surplus. B. $102 billion surplus. C. $107 billion deficit. D. $102 billion deficit.
Is it more beneficial for a country to have a strong national currency or to have a weak national currency? Explain.
Which group will most likely be negatively affected if the U.S. dollar drops in value against the British pound? American businesses purchasing equipment from Great Britain British businesses exporting products to the United States British consumers buying imported American products American producers shipping their goods to Great Britain
When the U.S. dollar appreciates, OPTIONS: foreign residents demand fewer of U.S. goods, and U.S. residents desire to purchase fewer foreign goods. foreign residents demand fewer of U.S. goods, and U.S. residents desire to purchase more foreign goods. foreign residents demand more of U.S. goods, and U.S. residents desire to purchase fewer foreign goods. foreign residents demand more of U.S. goods, and U.S. residents desire to purchase more foreign goods.
Suppose an economy’s national accounts are GNP = 100, C = 70, I = 40, G = 20 and EX = 20 where GNP is gross national product, C is consumption, I is investment, G is government spending, and EX is exports. Using the national income identity, find the value of imports (IM). What is the current account balance? What is the national savings rate (note: saving rate = S/Y)? What would the government, private, and total savings rate be if the government reduced taxes T = 10 while the other variables remain unchanged?
Will an increase in attractiveness of the US as a tourist destination DECREASE or INCREASE the value of US dollar?
Which best explains why U.S. businesses want the U.S. dollar to decrease in value against the Chinese renminbi? They want to be able to buy more raw materials from China. They want to sell more products to Chinese consumers. They want to buy more goods from Chinese businesses for resale. They want to be able to move their factories to China.
Fill in the blank using the words: positive, negative, raise, lower, improving, deteriorating, depreciate, i, Y, appreciate, raising, lowering, contraction, expansion, increase, decrease, higher, lower. During the early-1990s, Mexico maintained an exchange rate peg against the U.S. dollar (assume the peg is hard). When President Zedillo took office in December 1994, he faced several challenges. A combination of the assassination of a presidential candidate and the rebellion in Chiapas had led to an increase in the expected future exchange rate, E (the market got worried that the exchange rate peg would be abandoned in the future). According to the IS-LM-FX model, an increase in Ee will the foreign return curve in the FX market. Under a floating exchange rate, this would cause the spot exchange rate to as investors shift deposits out of Mexico expecting a return on U.S. deposits. Of course, this cannot happen under a fixed exchange rate regime (hard peg), which means Banco de Mexico…
If the dollar depreciates relative to the Japanese yen, how will this affect the dollar price of a Japanese camera produced by Nikon, for example. How will this change influence the quantity of Nikon cameras purchased by Americans?