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- Pls help with below homework. What does a negative financial account balance mean for the economy of the country concerned? For Example, Until 2013 the financial account was presented like other accounts, in credit and debit. But after 2013, the principle of recording changed.The balance of payment is divided into two major accounts which are a. Current account and the trade account. b. Current account and the reserves. c. Current account and capital account d. Capital account and trade account.In Minland, the central bank lowers the interest rate from 5 per cent a year to 3 per cent a year. a.Describe in detail the steps that the Bank of Minland must follow to make the interest rate fall? b.Describe the effects of the lower interest rate on consumption expenditure and investment. c. Describe the effects of the lower interest rate on the exchange rate of the Minland dollar for the UK pound. d.Describe the effects of the change in the Minland dollar exchange rate on Minland’s net exports. e.Explain whether the change in the interest rate shifts or brings a movement along Minland’s interest-sensitive expenditure curve. f.Explain the full set of ripple effects of the interest rate cut ending with the changes in real GDP and the price level.
- Complete the sentence. The Canadian interest rate differential rises if ______, and the larger the Canadian interest rate differential, the ______ is the demand for Canadian dollars in the foreign exchange market. A. the Canadian interest rate falls; smaller B. the foreign interest rate falls; greater C. the foreign interest rate rises; greater D. the Canadian interest rate rises; smallerNigeria is the world’s biggest producer of roses. The global demand for rosesincreases and at the same time Colombia’s central bank increases the interest rate.In the foreign exchange market for Nigerian naira, what happens to:i. The demand for naira?ii. The supply of naira?3. If interest rates increase in a country with a fixed exchange rate, what will the central bank do? A. Buy the country's currency B. Sell the country's currency C. Engage in contractionary fiscal policy 4. The United States has floating exchange rates. Suppose there is an increase in inflation in the United States. What will happen? A. The U.S. central bank will sell U.S. currency so the exchange rate remains constant B. The U.S. central bank will buy Euros so the exchange rate remains constant C. The exchange rate (price of a dollar) will go up D. The exchange rate (price of a dollar) will go down 5. Belize uses a fixed exchange rate, with one Belize dollar equal to one half of a U.S. dollar. There is an increase in U.S. citizens traveling to Belize on vacation. What will the central bank do? A Buy the country's currency B. Sell the country's currency Sell bonds to banks C.
- QUESTION 43 Find out the cross rate between US$ and British Pound Sterling(£) if the spot rate between British Pound Sterling and Japanese Yen (¥) is ¥121/£ and the spot rate between US$ and Japanese Yen is ¥85/$. A. $1.52/£. B. $1.42/£. D. £1.52/$.What impact might a central bank's decision to raise interest rates have on the exchange rate of its currency in the short term? A. The exchange rate is likely to depreciate. B. The exchange rate is likely to appreciate. C. The exchange rate will remain unchanged. D. The exchange rate will become more volatile.1. Explain briefly one the objective of national income accounting and balance of payment.
- 4. Short Answer Questions: If the price level in Japan is 1.0, the price level in the U.S. is 2.0, and it costs 100 yen to buy one dollar, then the nominal exchange rate is exchange rate between the U.S. and Japan is goods. _dollar / yen, the real Japanese goods per US 5. In order for an individual to be indifferent between holding foreign or domestic bonds, A. the Marshall-Lerner condition must hold. B. the foreign and domestic interest rates must be equal. C. the expected rate of depreciation of the domestic currency is zero. D. the interest parity condition must hold. 6. Assume that the interest parity condition holds. Also assume that the U.S. interest rate is 8% while the U.K. interest rate is 6%. Given this information, financial markets expect the pound to _(appreciate / depreciate) by %.Answer the question according to the graph below. Dollar/euro exchange rate, Ee Ese Dollar return Dollar return 2' 2' 4' Expected euro return Expected euro return Ege 3' 1' Ese Rates of return (in dollar terms) R R L(Rg. Yus) L(Rg. Yus) Mus Pis Mis Pis 4. U.S. real money supply Mus Mus Pus P1 US U.S. real money holdings U.S. real money holdings Assume that the U.S. money supply is initially given at M'us, the price level is initially given at PUs, and the equilibrium exchange rate is initially at E's/e. Which of the following is TRUE when the nominal money supply permanently increases from Mus to M²us? Lütfen birini seçin: O A. the money supply increase does not affect exchange rate expectations O B. the dollar depreciates against the euro in the long-run. O C. the real money supply rises from M'us / P'us to M²us / P²us in the short run O D. In the short-run, the dollar's depreciation is smaller than it would be if the money supply increase was temporary rather than permanent.