7. A weak home currency may result in the following except:A. Increased exports.В.Decreased imports.C. Lower domestic inflation.D. Reduced unemployment.

A powerless home currency will in general expand a nation's fares and abatement its imports,…

Answered: 7. A weak home currency may result in…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 14RQ: What does it mean to say that a currency appreciates? Depreciates? Becomes stronger? Becomes weaker?

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Similar questions

Use the demand-and-supply of foreign currency graph to determine what would happen to a small, open economy that experienced capital outflows.
A British pound cost 2.00 in U.S. dollars in 2008, but 1.27 in U.S. dollars in 2017. Was the pound weaker or stronger against the dollar? Did the dollar appreciate or depreciate versus the pound?
What does it mean to say that a currency appreciates? Depreciates? Becomes stronger? Becomes weaker?
If a countrys currency is expected to appreciate in value, what would you think will be the impact of expected exchange rates on yields (e.g., the Interest rate paid on government bonds) in that country? Hint: Think about how expected exchange rate changes and interest rates affect a currencys demand and supply.
Imagine that the U.S. economy finds itself in the following situation: a government budget deficit of 100 billion, total domestic savings of 1,500 billion, and total domestic physical capital investment of 1,600 billion. According to the national saving and Investment Identity, what will be the current account balance? What will be the current account balance if Investment rises by 50 billion, while the budget deficit and national savings remain the same?

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7. A weak home currency may result in the following except: A. Increased exports. В. Decreased imports. C. Lower domestic inflation. D. Reduced unemployment.