Who benefits from an appreciation of the Swiss Franc? Who benefits from a depreciation of the Swiss Franc? Why would the Swiss government be concerned about a strong appreciation of the Swiss Franc?
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- Explain the impact on US export and import if the US dollar has depreciated in comparison with other currencies. For example, the exchange rate for the Canadian dollar was 1.36 per U.S dollar in 2003. Now in 2020, it is 1.31 Canadian dollars per U.S.dollar under this case the dollar has suffered a slight depreciation. Also, when the dollar has depreciated in the case of the Chinese Yuan from 8.27 in 2003 to 6.69 yuans in 2020 per U.S dollar. Also, when there is not either appreciation or depreciation from 2003 to 2020 which is the case of Saudi Arabia currency its exchange rate remains the same 3.75 Riyals per dollar since 2003. Then explain the impact of U.S. exports and imports under these scenarios.Jan 2, 2015 Sep 27, 2016 $1.20 $1.12 1 British Pound (GBP) $1.56 $1.30 1 $US 1 $US 1 Euro 119.69 Yen 2.66 BRL 1. In relation to the Euro, has the $US has appreciated or depreciated from Jan 2015 to Sep 2016? 2. In relation to the Euro, has the GBP has appreciated or depreciated from Jan 2015 to Sep 2016? 3. How many Brazilian Reals (BRL) would be needed on Sep 27, 2016 to purchase Yen 10 million?Explain how nominal exchange rate affects real exchange rate.
- 4. Analyzing the effects of a trade deficit You have just been hired by the U.S. government to analyze the following scenario. Suppose the U.S. agricultural industry is concerned about of fruit and vegetable imports to the United States, a practice that hurts domestic producers. Lobbyists claim that implementing a tariff on imp would shrink the size of the trade deficit. The following exercise will help you to analyze this claim. The following graph shows the demand and supply of U.S. dollars in a model of the foreign-currency exchange market. Shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the tariff. REAL EXCHANGE RATE (Units of foreign currency per dollar) Supply QUANTITY OF DOLLARS Demand Demand 0 SupplyIn 1971 a British company, Beecham Group, received a Swiss franc loan of CHF 100 million. By the time the loan was repaid in 1976, the British pound had depreciated significantly against the Swiss franc. Which of the following statements is correct? A. The cost in British pounds of making the repayment did not change. B. The financial manager of Beecham Group would not be concerned about the change in the value of the pound. C. The change in the value of the British pound increased the profitability of the Beecham Group. D. The cost in British pounds of making the repayment increased significantly.The following is a graph of an index from 4/9/2018-7/3/018 that tracks the movement of 25 emerging market currencies relative to the U.S. dollar. The currencies include the Russian ruble, Mexican peso, Brazilian real, Chinese Yuan, Indian Rupee, etc. The graph illustrates a steady appreciation of the dollar against these 25 currencies: Apr 9, 2018 Apr 23, 2018 May 7, 2018 May 21, 2018 Jun 4, 2018 Jun 18, 2018 Jul 2, 2018 1,700.00 1,680.00 1,660.00 1,640.00 1,621.99 Question: In the short-run, where firms in those emerging markets can't adjust their purchasing habits with the U.S., what is likely to happen to the price level? The price level and the inflation rate is likely to decline because imports from the U.S. are going to become much cheaper. This is due to the fact that the dollar has become much cheaper for these emerging markets. The price level is likely to fall because exports will increase dramatically for these countries. This is due to the fact that movements in a country's…
- The following table shows four nominal exchange rates expressed in Canadian dollars per unit of the foreign currency for two different quarters (Source: Bank of Canada). The column names are the currency codes. Answer the questions using this table. i. MYR: ii. NOK: Year 2000 iii. PEN: 2010 iv. TWD: O Appreciated Quarter 4 4 O Appreciated O Depreciated O Remained unchanged Appreciated O Indicate whether each currency has appreciated, depreciated, or neither, against the Canadian dollar between the two periods. Appreciated O Depreciated ORemained unchanged MYR Depreciated 0.4015 0.3251 Depreciated NOK O 0.1646 0.1709 Remained unchanged PEN Remained unchanged 0.4339 0.3612 TWD 0.0471 0.03344. Before 12th August 2005, the US Dollar (USD) was trading at 8.20 Renminbi yuan per dollar (RMB, China’s official currency) in the financial market of China. After that date, the USD was trading at only 7.50 RMB yuan per dollar in China. (1) If you received $100 US dollars from your friend in New York in July 2005, hold it for half a year and finally exchange it for RMB in Chengdu in late January 2006, how much value in RMB would you lose? (2) What is the percentage change in the US Dollar’s value?REAL EXCHANGE RATE (Units of foreign currency per dollar) QUANTITY OF DOLLARS Given this change, the dollar Supply Change due to a quota Demand Demand Supply Fill in the following table with the effect of a quota on the following items: Supply of Loanable Funds Real Interest Rate National Saving Net Exports
- During 2018 till 2020, Malaysian exchange rate faced a depreciation. Based on this situation, what is the reason of the appreciation happen in that year?1.Determine the initial effect from the following transactions on the Malaysia net exports (exports and imports) or net capital outflow (purchase of foreign assets by locals and purchase of domestic assets by foreigners). a. A Japanese spending his time and money having a vacation in Singapore. b. Megan, an American buying a pair of shoes from Bata shoes made in Malaysia.