Assume the following to be true in Argentina, Exports contracts are denominated in foreign currency. Imports contracts are denominated in foreign currency.
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- How will exchange rates change in a country A where prices double year after year in comparison with a country B that achieves long-run price stability?Suppose the Canadian government imposed import quotas on agricultural products. According to the foreign-currency exchange market diagram, which of the following outcomes would most likely result? a. Only the supply curve would shift right. b. Both the demand and supply curves would shift left. c. Only the demand curve would shift right. d. Both the demand and supply curves would shift right.Assume the following to be true: Exports contracts are denominated in foreign currency ( yen) İmports contracts are denominated in foreign currency ( yen) After the devaluation of US $ against Yen , What will happen to US trade balance following a devaluation of the US $ ( in US $ value)
- Open -market operations are : a. Commerce Department efforts to open foreign markets to international trade b. Federal Reserve purchases and sales of government bonds . c. Securities and Exchange Commission rules requiring open disclosure of market trades. d. Treasury Department purchases and sales of the U.S. gold stock.International trade involves the sale of goods and services to residents in other countries (exports) and the purchase of goods and services from residents in other countries (imports). A country's balance-of-payments accounts keep track of the payments to, and receipts from, other countries for a particular time period. These include payments to foreigners for imports of goods and services, and receipts from foreigners for goods and services exported to them. Any transaction resulting in a payment to other countries is entered in the balance-of-payments accounts as a debit and given a negative (−) sign. Any transaction resulting in a receipt from other countries is entered as a credit and given a positive (+) sign. Balance-of-payments accounts are divided into the current account, the capital account, and the financial account. The current account records transactions that pertain to all three categories: (1) goods that refer to the import and export of physical goods, (2) services…Balance of payments accounting. For the following international transactions, identify the balance of payments accounts and whether the transaction would generate an inflow or an outflow of foreign exchange for the two countries involved. ■ U.S.-based General Electric (GE) sells 25 air turbines to Airbus-France for the total sum of $500 million. ■ U.S.-based Goldman Sachs advises the French government for the partial privatization of state-owned utility Gaz de France for a lump sum of $10 million. ■ American Airlines purchases five propeller aircrafts from Canada-based Bombardier for the total amount of $75 million. ■ TIAA-CREF—the pension fund of American college professors—purchases 1 million shares of South Africa’s Standard Bank for $16 million. ■ Air France purchases $2.5 million of jet fuel at Boston’s Logan Airport. Payment is made directly from Air France’s bank account with State Street in Boston. ■ Hong Kong–based Cathay Pacific pays a $25 million annual lease on two Boeing…
- Balance of payments accounting. For the following international transactions, identify the balance of payments accounts and whether the transaction would generate an inflow or an outflow of foreign exchange for the two countries involved. ■ U.S.-based General Electric (GE) sells 25 air turbines to Airbus-France for the total sum of $500 million. ■ U.S.-based Goldman Sachs advises the French government for the partial privatization of state-owned utility Gaz de France for a lump sum of $10 million. ■ American Airlines purchases five propeller aircrafts from Canada-based Bombardier for the total amount of $75 million. ■ TIAA-CREF—the pension fund of American college professors—purchases 1 million shares of South Africa’s Standard Bank for $16 million. ■ Air France purchases $2.5 million of jet fuel at Boston’s Logan Airport. Payment is made directly from Air France’s bank account with State Street in Boston. ■ Hong Kong–based Cathay Pacific pays a $25 million annual lease on two Boeing…explain advantages and disadvantages of the estimating foreign exchange premiumWhich factors may effect export and capital sensitivity in a country?And what type of policies may be used to increase the export and capital sensitivity? Why?could you answer this question in a minimum of 400 words
- You work for a Nova Scotia Company trying to successfully enter the cranberry market in Australia. Analyze the entry country (Australia) based on the following; What are the major exports, dollar value, and trends? What are the major imports, dollar value, and trends? Does the entry country have a surplus or deficit for trade? What are the exchange rates? Are there any restrictions on currency trade? You should also consider sweat shops, skilled labor, employee unrest, political and social activists and labor unions in your analysis.Discuss the four main functions of foreign exchange markets for global businesses.
