You are an economic adviser to the government of China in 2008. The country has a current account surplus and is facing gathering inflationary pressures. What would be your advice on how the authorities should move the renminbi’s exchange rate?

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: Travis takes two trips to Ecuador. On his first trip, he finds that one US dollar is worth 25000…

A: Exchange rate refers to the amount of domestic currency that required to purchase one unit of…

Q: Explain how interest rate parity determines exchange rate equilibrium?

A: Interest rate parity implies that the exchange rate between two currencies will adjust to ensure…

Q: You read in the paper that the dollar has strengthened in value relative to the euro. How is this…

A: Value of a currency states the price or interest rate at which people from different countries are…

Q: What is the current (within the last 48 hours) exchange rate between the U.S. dollar and the Chinese…

A: Exchange Rate: It refers to the value of currency of a country with respect to the value of currency…

Q: Suppose that the Federal Reserve cannot convince the public of its commitment to fight inflation in…

A: The movement of currency from one country to another country through exchange is called the exchange…

Q: Explain why supply of foreign currency rises in response to a rise in its exchange rate?

A: Generally in the given question, The rise in exchange rate actually denotes appreciation of foreign…

Q: Now assume that the COVID-19 pandemic is over and the vaccine worked out. The economy recovered and…

A: EXCHANGE RATE OVERSHOOTING It is an economic model first discussed by Rudi Dornbusch to explaining…

Q: , the fixed exchange rate between the British pound and the U.S. dollar was 1 pound equals $5. What…

A: The exchange rate of a currency is refer to a rate by which we can exchange one currency into…

Q: How does a fall in the exchange rate cause an increase in the cost of raw imported materials?

A: The import and export of a country are affected by the exchange rates.

Q: When you write an exchange rate in terms of how many units of a foreign currency it takes to buy one…

A: A direct quote depicts the amount of foreign currency that can be bought for a certain unit of the…

Q: What happens to the exchange rate of a country’s currency when that country experiences high levels…

A: Exchange rate is the rate at which nations currency are exchanged  and the rate is determined by the…

Q: The autonomous region of Catalonia has recently declared independence from Spain, and is looking for…

A: Answer -

Q: What is the definition of the nominal exchange rate? What would cause the demand for the foreign…

A: Nominal exchange rate: The nominal exchange rate is the amount of domestic currency needed to…

Q: Why is a current account surplus equivalent to foreign investment ？

A: The countries worldwide gets involved in the sale and purchase of the goods, services, inputs of…

Q: If a country has a floating exchange rate, then will a rise in the exchange rate be bad or good for…

A: The rate at which one country's money is exchanged for another country's currency is referred to as…

Q: In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the…

A: Exchange rate can be defined as the rate which defines the value of one currency in terms of another…

Q: Explain the various causes of a fall in the country’s exchange rate.

A: Answer to the question is a follows:

Q: Changes in the value of a nation's currency affect the nation's net exports, and thus GDP. How might…

A: The term "free floating exchange rate" refers to an exchange rate in which the market determines its…

Q: suppose there is a wave of popularity for American fruit in your country. How will this affect the…

A: The balance of trade impacts cash exchange rates through its impact on the market interest in…