MANKIW: PRINCIPLES OF MACROECONOMICS
8th Edition
ISBN: 9781337801782
Author: Mankiw
Publisher: CENGAGE L
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Question
Chapter 19, Problem 5CQQ
To determine
The impact of capital inflow on the exchange rate and interest rate.
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If the Japanese yen appreciates against the U.S. dollar
a. Americans should find Japanese goods are now less expensive
b. Japanese residents would find Japanese goods are relatively less expensive than American goods
c. U.S. goods should have an easier time competing against Japanese goods in both countries
d. Japanese goods should have an easier time competing against U.S. goods in both countries
One of Fiji's major trading partners is Australia. If Australia's GDP rises, the demand for Fiji's exports will _____, leading to a _____ shift in the demand for the Fijian dollar.
a. rise; right
b. rise; left
c. fall; right
d. fall; left
Give the answer with detail explanation.
The US and China are the two biggest economies of the world. Which of these situations will most likely increase the value of the US dollar as it trades with China?
a.
China’s GDP increases faster than US
b.
China’s exports increases sharply
c.
China imports more from the US than it exports to the US
d.
China exports more to the US than it imports from the US
Chapter 19 Solutions
MANKIW: PRINCIPLES OF MACROECONOMICS
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- only typed solutionarrow_forwardIf there is a decrease in the desire of foreigners to purchase goods and services from the United States and a lower desire to invest in U.S. banks and businesses, then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would depreciate. B. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the U.S. dollar would depreciate. D. The equilibrium quantity of foreign currency would increase and the U.S. dollar would appreciate.arrow_forwardWill an increase in attractiveness of the US as a tourist destination DECREASE or INCREASE the value of US dollar?arrow_forward
- 6. If Canadian consumers expect the value of the Canadian dollar to rise against the US dollar, what impact would we expect this to have on Canadians' demand for American made products? a. The demand for American-made items would fall. b. The demand for American-made items would not change. c. The demand for American-made items would rise. d. The demand for American-made items would double.arrow_forward40. Thailand is a net-importer. This means that they import more than they export. How does this affect the value of their currency with respect to foreign exchange? a.their currency will not be affected b.their currency will become strong c.their currency will become weak d.None of thesearrow_forwardIf the U.S. interest rates fall relative to foreign interest rates O capital flows out of the United States into other countries increase. the U.S. imports rise. the U.S. dollar appreciates. capital flows into the United States from other countries increase.arrow_forward
- If there is an unrest in Turkey, and Turkish investors purchase U.S. securities, the Part 2 А. demand for the Turkish currency will rise. В. supply of the Turkish currency will fall. С. demand for the Turkish currency will stay the same. D. supply of the Turkish currency will rise.arrow_forwardIn the foreign exchange market, when the U.S. interest rate rises, the supply of dollars ________ and the foreign exchange rate ________. A. decreases; rises B. increases; falls C. increases; rises D. increases; does not change E. decreases; fallsarrow_forwardSuppose U.S. dollar appreciates versus the Euro. Then we should expect: a. U.S. export to European Union rise b. U.S. import from European Union decline c. Both U.S. export and import decline d. U.S. export to European Union declinearrow_forward
- Rapid increases in the U.S. exports of goods and services will result in a(n) U.S. dollars in the foreign exchange foreign currency and a(n). market. increase in the demand for; increase in the supply of increase in the supply of; increase in the demand for shortage of foreign currency; surplus of decrease in the supply of; decrease in the demand forarrow_forwardThe demand curve for U.S. dollars is downward sloping because an increase in the foreign exchange value of the dollar makes A. U.S. goods, services, and assets less expensive to foreigners. B. U.S. goods, services, and assets more expensive to foreigners. C. foreign goods, services, and assets more expensive to Americans. D. foreign goods, services, and assets less expensive to Americans.arrow_forwardestion 18 Other things the same, if the dollar appreciates relative to the Japanese yen, then A. the exchange rate falls. It will cost fewer yen to travel in the U.S. B. the exchange rate falls. It will cost more yen to travel in the U.S. C. the exchange rate rises. It will cost fewer yen to travel in the U.S. D. the exchange rate rises. It will cost more yen to travel in the U.S.arrow_forward
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