Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 32, Problem 2QCMC
To determine
The impact of appreciation of domestic currency on imports and exports.
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Students have asked these similar questions
As domestic currency appreciates, we would expect
a. Trade deficit to decrease.
b. Trade deficit to increase.
c. Imports to decrease.
d. Exports to increase.
A high value of a currency would result in which of the following?Select one:a. Greater competitiveness of exportsb. More exportsc. Increased demand of the higher value currencyd. Increased demand of exports of higher currency value products e. More ImportsIf
Malaysian exports create
a.
Supply of foreign currencies to Malaysia and a demand for RM in foreign countries.
b.
Demand of foreign currencies to Malaysia and supply for RM in foreign countries.
c.
Demand of foreign currencies to Malaysia and a demand for RM in foreign countries.
d.
Supply of foreign currencies to Malaysia and a supply for RM in foreign countries.
Chapter 32 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- Increased America imports of Japanese goods creates a. an increase in demand for U.S. dollars and a decrease in demand for Japanese yen. b. a decrease in demand for U.S. dollars and an increase in supply for Japanese yen. c. an increase in demand for Japanese yen and a decrease in supply of U.S. dollars. d. an increase in demand for Japanese yen and an increase in supply of U.S. dollars. e. an increase in supply of Japanese yen and an increase in supply of U.S. dollarsarrow_forwardWhat effect would a devaluation of a country's currency most likely have on its export volumes? A. Export volumes would decrease, as goods become more expensive in foreign markets. B. Export volumes would increase, as goods become cheaper in foreign markets. C. Export volumes would remain unchanged, as currency value does not affect trade. D. Export volumes would initially decrease, but then increase over time due to adjustments in trade agreements.arrow_forwardDraw a demand for dollars curve. Label it D. Draw a supply of dollars curve. Label it S. Draw a point at the equilibrium quantity and equilibrium exchange rate. Exchange rate (U.S. cents per Canadian dollar) 120- 110- Draw an arrow between the D and S curves that indicates a price at which there is a surplus of dollars. Label it. 100- 90- 80- 70- 60- 50- 20 50 70 30 40 60 80 Quantity (billions of Canadian dollars per day) >>> Draw only the objects specified in the question. Selected: Delete Clear nonearrow_forward
- A nation’s merchandise trade balance reflects _____. A.the value of exports of servicestrade b. in tangibles and intangibles c.the same information as its balance of payments d.trade in tangible products e.the value of imports of servicesarrow_forwardWhich of the following would increase exports in the United States? The United States purchases 500 silver necklaces from Mexico. The government of Mexico purchases 500 Ford F-150 pickup trucks from the United States. A Mexican citizen purchases 25 shares of stock in Ford Motor Company. The U.S. government donates $5 million to Mexico to help victims of drought in Mexico.arrow_forwardThe main items on the A. current account are imports and R.O.W. investments in Canada. B. financial account are exports and Canadian investments in R.O.W C. financial account are imports and R.O.W. investments in Canada. D. current account are exports and imports. E. current account are exports and Canadian investments in R.O.W.arrow_forward
- If the demand for the goods that we export increases______?Group of answer choices 1The exchange rate is unaffected. 2The exchange rate could decrease (the US $ depreciates) or it could increase (the US $ appreciates). 3The exchange rate increases (the US $ appreciates). 4The exchange rate decreases (the US $ depreciates).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_forwardWhy would a country want to impose an exchange rate ceiling? a. A strong currency encourages imports and can be used to fight inflation. b. A strong currency stimulates an economy. c. A weak currency encourages imports and can be used to fight inflation. d. A weak currency will encourage exports and stimulate the economy.arrow_forward
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