Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 11, Problem 5MC
To determine
Currency appreciation.
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Students have asked these similar questions
If the Chinese yuan devalues relative to the U.S. dollar, then
Group of answer choices
U.S. producers and Chinese consumers will benefit.
U.S. producers will benefit and Chinese consumers will hurt.
U.S. producers will be hurt and Chinese consumers will benefit.
U.S. producers will be hurt and Chinese consumers will be hurt.
U.S. consumers will be hurt and Chinese producers will be hurt.
What would happen if Mexico has a trade deficit with the US?
The demand for U.S. dollar should increase and the U.S. dollar should appreciate against the Mexican peso.
The demand for Mexican peso should increase and the U.S. dollar should depreciate against the Mexican peso.
The supply for Mexican peso should increase and the Mexican peso should appreciate against the U.S. dollar.
Exchange rate
(Philippine Peso/
South Korean
Won)
XR₂
XR₁
XR3
XR₁
FIGURE 1
Q3 Q₂ Q₁
Q4
Supply of South Korean Won
Demand for South Korean Won
Quantity of South Korean Won
14. Suppose the interest rate in South Korea is 11% and the interest in the Philippines is 4%. What will
happen to the demand for South Korean won?
a. Shift to the right
b. Shift to the left
c. Remain the same
d. Pivot upwards
Chapter 11 Solutions
Managerial Economics: A Problem Solving Approach
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- Suppose that the U.S. dollar appreciates against the Japanese Yen. What will occur as a result? purchasing power parity will begin to hold U.S. exports to Japan will become cheaper and increase, imports from Japan to the U.S. will become more expensive and decline U.S. currency becomes over-valued relative to Japanese currency U.S. exports to Japan will become more expensive and decline, imports from Japan to the U.S. will become cheaper and increasearrow_forwardIf the exchange rate between the U.S. dollar and Japanese yen changes from $1=70 yen to $1=100 yen, then: All Japanese producers and consumers will lose. U.S. auto producers and autoworkers will lose. U.S. consumers of Japanese TV sets will benefit. Japanese tourists to the U.S. will benefit.arrow_forwardSomeone please answer this questionIf international speculators lose confidence in foreign economies and want to move some of their wealth into the U.S. economy, then in the short run there is A. a decrease in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a higher U.S. price level. B. an increase in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a lower U.S. price level. C. an increase in the value of the U.S. dollar in foreign exchange markets, a higher level of U.S. output and a higher U.S. price level. D. a decrease in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a lower U.S. price level.arrow_forward
- 1. a. All other things held equal, a higher value of the dollar (it takes more pesos to buy a dollar) will: Move you down along Demand Curve for Dollars. Move you up the Supply Curve for Dollars. Shift the Supply Curve for Dollars. Shift the Demand Curve for Dollars. b. The equilibrium exchange rate between the dollar and peso is: Determined primarily by the demand of Argentines for US goods. Determined primarily by the demand of US Citizens for Argentine goods. Determined by the interaction of both the above. Entirely random. c, In a hypothetical foreign exchange market where exchange rates are completely free to move in response to market forces, the equilibrium exchange rate of pesos to the dollar would be where; Argentina has a trade surplus with the US. Argentina has a trade deficit with the US. Trade between the US and Argentina is in balance (neither country has a trade deficit or…arrow_forward-When a currency depreciates .... this. ) .... It forces exporters. B. ) ... It is always terribly for the economy. C. ) ... It Receives Internal Precautions. -When a currency appreciates .... A.) ... it is always the best thing to happen to an economy. B.) ... it hinders exports. C.) ... it always means that the people of a nation are becoming richer. -Interest rates ... A.) .... do not affect the value of national currencies at all. B.) ... are a mean that governments have to control the appreciation or depreciation of a local currency C.) ... are not relevant for governmentsarrow_forwardYou own a local company. In the past year, you successfully expanded your sales market into Europe, and you now have profits and cash denominated in euros. You want to convert the euros to your home country currency to repatriate the profits and pay taxes. You are a. not required to convert the euros to the home currency to pay taxes. b. a demander of the euro in the foreign exchange market. c. a supplier of your home country's currency in the foreign exchange market. d. a demander of your home country's currency in the foreign exchange market.arrow_forward
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