a. What should be the exchange rate S($/RMB) based on PPP? b. If the inflation rate in China will be 3% whi the inflation rate in the U.S. will be 2% over the next year, what should be the future exchange rate S360($/RMB) based on PPP? c. If S($/RMB) indeed increases by 2%, what does it imply to the competitiveness of the U.S. exporters? d. The market exchange rate

a. What should be the exchange rate S($/RMB) based on PPP? b. If the inflation rate in China will be 3% whi the inflation rate in the U.S. will be 2% over the next year, what should be the future exchange rate S360($/RMB) based on PPP? c. If S($/RMB) indeed increases by 2%, what does it imply to the competitiveness of the U.S. exporters? d. The market exchange rate

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 9PA

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Does a higher rate of return in a nations economy, all other things being equal, affect the exchange rate of its currency? If so, how?
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Only like if no ai or downvoted for ai content Suppose that the equilibrium exchange rate between the United States and South African is 15.13 Rand per US dollar. Further suppose that the two countries are trading partners with each other. Inflation now rises in South Africa. Which of the following answer choices correctly represents the shift that would occur in the US foreign exchange market? The supply of US dollars would fall. The demand for South African Rands would rise. The supply of South African Rands would rise.
A. Explain how nominal exchange rate affects real exchange rate.B. Suppose that a chocolate bar costs 20 euros in France and 30 Singaporean dollars inSingapore. If the exchange rate is 1.20 euros per Singaporean dollars, What is the realexchange rate?2. Suppose the economy is in recession. Policymakers estimate that aggregate demand is$100 billion short of the amount necessary to generate the long run natural rate of output.That is, if aggregate demand were shifted to the right by $100 billion, the economy wouldbe in long run equilibrium.a. Explain the impact on the economy if the government chooses to use fiscal policy tostabilize the economy and the marginal propensity to consume (MPC) is given as0.75 with no crowding out.b. If there is a crowding out effect and investment is very sensitive to changes in theinterest rate, should the government increase spending more or less than this amount?3. Suppose, OPEC decides to cut down oil production, causing oil price to go up.a. Explain…
The Foreign Exchange MarketThe Jamaican dollar experienced a rapid depreciation in the exchange rate during 2020 due to thepandemic's impact on key sectors. The exchange rate in 2020 closed at J$142.65 to US$1.00,after opening the year at J$132.57, resulting in a 7.6 per cent depreciation. As at FridaySeptember 16, 2022, the exchange rate was at approximately $ JA 150 to US $1 Arguments for and against fixed exchange rate.
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