Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

Question

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Answer 1

Question

Chapter 34, Problem 4QP

(a)

To determine

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

(b)

To determine

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

(c)

To determine

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

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1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically. 2. Consider the following table of long-run total costs for three different firms: Quantity Total Cost ($) Firm A Firm B Firm C 1 60 11 21 2 70 24 34 3 80 39 49 4 90 56 66 5 100 75 85 6 110 96 106 7 120 119 129 Does each of these firms experience economies of scale or diseconomies of scale? Explain your answer with necessary calculations.

Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer.State the condition for a consumer's utility maximizing choice and illustrate graphically.

Answer 2

Question

Chapter 34, Problem 4QP

(a)

To determine

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

(b)

To determine

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

(c)

To determine

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

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Answer 3

Question

Chapter 34, Problem 4QP

(a)

To determine

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

(b)

To determine

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

(c)

To determine

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

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Answer 4

Question

Chapter 34, Problem 4QP

(a)

To determine

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

(b)

To determine

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

(c)

To determine

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

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Answer 5

Chapter 34, Problem 4QP

(a)

To determine

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

(b)

To determine

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

(c)

To determine

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

Answer 6

Chapter 34, Problem 4QP

(a)

To determine

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

Answer 7

Chapter 34, Problem 4QP

(a)

To determine

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

Answer 8

(b)

To determine

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

Answer 9

(b)

To determine

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

Answer 10

(c)

To determine

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

Answer 11

(c)

To determine

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 34.2 - Prob. 1ST Ch. 34.2 - Prob. 2ST Ch. 34.2 - Prob. 3ST Ch. 34.2 - Prob. 4ST Ch. 34.3 - Prob. 1ST Ch. 34.3 - Prob. 2ST Ch. 34.3 - Prob. 3ST Ch. 34.3 - Prob. 4ST Ch. 34 - Prob. 1QP Ch. 34 - Prob. 2QP

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

Solution Summary: The author explains the difference between currency appreciation and currency depreciation. Inflation rate refers to the percentage change in the price level from the preceding period.

Determine whether it is appreciation or depreciation when the U.S. interest rate is above the Japanese interest rate.

Determine whether it is appreciation or depreciation when the rate of inflation rises in relation to the U.S. inflation rate.

Determine whether it is appreciation or depreciation when there is an increase in U.S. income while no change in Japanese income.

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Chapter 34 Solutions