a)
To change: Whether the statement “the interest rate parity condition shows that across the country interest rate is the same” is true or false
a)
Explanation of Solution
False, the given statement is false because the interest rate parity refers to keep the difference in the interest rate between the nations that change this into the forward exchange rate.
b)
To change: Whether the statement is true or false
b)
Explanation of Solution
True, the given statement is true because the condition of interest rate parity shows that as there is an increase in expected exchange rate then there will be an appreciation of the domestic currency, keeping the other things constant.
c)
To change: Whether the statement is true or false
c)
Explanation of Solution
It is true because if there is an expectation that the dollar will
d)
To change: Whether the statement is true or false
d)
Explanation of Solution
It is true, if there is appreciation in the expected exchange rate than the current exchange rate will immediately appreciate.
e)
To change: Whether the statement is true or false
e)
Explanation of Solution
The statement is true because the central bank changes the magnitude of the exchange rate by varying their domestic rate of interest in relation to the foreign interest rate.
f)
To change: Whether the statement is true or false
f)
Explanation of Solution
The given statement is false, that an increase in domestic interest rates, all other factors equal, does not increase exports.
g)
To change: Whether the statement is true or false
g)
Explanation of Solution
It is false to state that a fiscal expansion tends to increase net export keeping all other factors equal.
h)
To change: Whether the statement is true or false
h)
Explanation of Solution
The given statement is uncertain because the effect on output by the fiscal policy under fixed exchange rate and the flexible exchange rate is directly related to the economic situations. If the economic situations are in the favor of a fixed exchange rate then the output effect will be greater than the effect of flexible exchange rates or vice versa.
i)
To change: Whether the statement is true or false
i)
Explanation of Solution
It is false, United States central bank − the Federal Reserve (the Fed) − is charged with ensuring a certain degree of stability within the financial system of the country. The Fed has unique resources to allow adjustments to broad
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Chapter 19 Solutions
Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
- Suppose Person A is looking for a health insurance plan on Oregon's health insurance marketplace and they find one with the following details: Monthly Premium: $331 Deductible: $5,000 Primary care visit to treat injury or illness: $35 copay Imaging (CT/PET Scans MRIs): 40% coinsurance after deductible Ambulance: 40% coinsurance after deductible Inpatient hospital stay: 40% coinsurance after deductible Suppose further that Person A purchases this plan and it takes effect in January 2022. The cost Person A pays per month for this health insurance is equal to _. Person A must pay. before coinsurance kicks in. 0000 $35; $5,000 $35; $331 $331; $5,000 $331; $35 Multiple Choice 1 point Suppose Person A is looking for a health insurance plan on Oregon's health insurance marketplace and you find one with the following details: Monthly Premium: $331 Deductible: $5,000 Primary care visit to treat injury or illness: $35 copay Imaging (CT/PET Scans MRIs): 40% coinsurance after deductible Ambulance:…arrow_forwardUse the figure below to answer the following question. Point X and Y represent two non-ideal contracts that the individual is faced with buying. From this information, you can conclude that if given the option between points B and Y the individual would prefer: Utility A у в 0000 UKI) E[Bp IH point B- the actuarially fair and full contract point Y-the actuarially unfair but full contract point Y- the actuarially fair, but partial contract point B- the actuarially fair, but partial contract incomearrow_forward2. Another issue facing millennials is the growing income and wealth inequality. We will use our model to understand the implications of this issue. A. Begin from the baseline preferences and endowments. Assume Xavier is wealthier than Yuri. Xavier has an endowment of 1100 pounds for each period (E1=E2=1100). Yuri has an endowment of only 900 pounds in each period (E1=E2=900). Note that each period's market supply is unchanged (1100 + 900 = 1000 + 1000 = = 2000). Determine the equilibrium interest rate. r = % B. Begin from the baseline preferences and endowments. Assume Yuri is wealthier than Xavier. Xavier has an endowment of only 900 pounds in each period (E1=E2=900). Yuri has an endowment of 1100 pounds for each period (E1=E2=1100). Note that each period's market supply is unchanged (1100 + 900 = 1000 + 1000 = 2000). Determine the equilibrium interest rate. r = % C. Begin from the baseline preferences and endowments. A third person named Zena joins our economy. Zena is very…arrow_forward
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- Not use ai pleasearrow_forwardJim's Bank Account for the Year to 30 April 2008: We will start by calculating the balance of the business bank account, using the transactions provided. Opening Balance: Jim initially deposited €150,000 into his business bank account on 1 May 2007. Transactions: Receipts: Cash Sales (May 2007 to April 2008): €96,000 Credit Sales (Business customers): €19,600 (Note: This amount is not yet received as it is on credit, but it will be included in the Income Statement and not the bank balance at this stage.) Bank receipts from credit customers (amount owed at 30 April 2008): €6,800 Total Receipts:€96,000 (Cash Sales) + €6,800 (credit customer payments) = €102,800 Payments/Expenditures: Lease Payment (Paid in advance for five years): €50,000 Shop Fitting: €10,000 Assistant’s Wages: €250 per month × 12 months = €3,000 Telephone expenses: €800 Heat & Light expenses: €1,000 Jim’s withdrawals for personal expenditure: €1,000 × 12 months = €12,000 Accounting Fee (after the year-end):…arrow_forwardSolve the problemarrow_forward
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