What is the short-run effect on the exchange rate of an increase in domestic real GNP, given expectations about future exchange rates? OA. Money demand increases, the domestic interest rate increases, and the domestic currency appreciates OB. Money demand decreases, the domestic interest rate decreases, and the domestic currency appreciates. OC. Money demand decreases, the domestic interest rate decreases, and the domestic currency depreciates OD. Money demand increases, the domestic interest rate increases, and the domestic currency depreciates

What is the short-run effect on the exchange rate of an increase in domestic real GNP, given expectations about future exchange rates? OA. Money demand increases, the domestic interest rate increases, and the domestic currency appreciates OB. Money demand decreases, the domestic interest rate decreases, and the domestic currency appreciates. OC. Money demand decreases, the domestic interest rate decreases, and the domestic currency depreciates OD. Money demand increases, the domestic interest rate increases, and the domestic currency depreciates

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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S 2
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Assume that the interest rate is given and equal to i =i0 and also that the real exchange rate is constant. We assume aggregate spending by domestics residents is A = A + cY - bi and net exports, NX are given by Q = Q + mY, where Q is autonomous import spending. Exports are given and equal to X = X. A) What is the total demand for domestic goods. B)What is the equilibrium level of income? Faiz oranının verildiğini ve i = i0'a eşit olduğunu ve ayrıca reel döviz kurunun sabit olduğunu varsayalım. Yerli sakinlerin toplam harcamalarının A = A + cY olduğunu varsayıyoruz - iki ve net ihracat, NX, Q = Q + mY ile verilir, burada Q otonom ithalat harcamasıdır. İhracat verilir ve X = X'e eşittir.A) Yerli malı için toplam talep nedir?B) Denge gelir düzeyi nedir?
Consider an increase in a country’s technology such that the relative supply of domestic products increases. Then, Group of answer choices the real and nominal exchange rates of the domestic country appreciate the real exchange rate of the domestic country appreciates, but the change in the nominal exchange rate is not determined the real exchange and nominal exchange rates of the domestic country depreciate the real exchange rate of the domestic country depreciates, but the change in the nominal exchange rate cannot be determined
In a small open economy, when the government reduces national saving, the equilibrium real exchange rate: rises and net exports fall. rises and net exports rise. falls and net exports fall. O falls and net exports rise.
Q 1Using the DD-AA model, explain the effects of temporary fiscal and monetary changes performed by a domestic country listed below. For each change, pro- vide diagrammatic explanation and comment on what happens to the nominal exchange rate (under a floating exchange rate regime), domestic output, and domestic CA (current account). (a) Tax raise. (b) Lower domestic money supply. Question 2 For each of the fiscal and monetary changes listed in Question 1, describe one fiscal or monetary policy aiming to maintain full employment level. For the policy you pick, provide a diagrammatic explanation using DD-AA model and comment on what happens to the nominal exchange rate, domestic output, and domestic CA as a result of the policy you choose.
Suppose that we observe the following change in the international market for USD: a USD B O The CAD woul appreciate. O The CAD woul depreciate. S₁ Q In this case, what wopuld we expect to happen to the price of CAD if the CAD-USD exchange rate was flexible?
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Figure 13-2 Real Interest Rate World interest rate, fo Real Exchange Rate E₁ 토 Supply of Loara ble Funds Demand for Loa rable Funds Quantity of Loanable Funds Supply of Canadian Dollars (S-1) Do Quantity of Dollars Refer to the Figure 13-2. If the economy were initially in equilibrium at r0 and EO and the government removed import quotas, what would happen to the exchange rate? a. It would appreciate to El. b. It would appreciate to E2. C. It would depreciate to El. d. It would depreciate to E2.