-Exports contracts are denominated in foreign currency. Imports contracts are denominated in foreign currency. What will happen to the domestic trade balance following a devaluation of domestic currency? Explain.

Q: Explain why the U.S. demand for Mexican pesos is downward-sloping and the supply of pesos to…

A: The demand and supply are considered as the market forces through which the quantity and price is…

Q: trade plays an important role in the development of any economy. ii. If there is expansionary fiscal…

A: Economic growth  1) The economic growth refers to situation when there is a monetary increase in…

Q: trade surplus (exporting more than importing) and trade deficit (importing more than exporting) on…

A: The ‘balance of trade’ (BOT) is the sum of a country's import and export.   The BOT is positive(+)…

Q: Balance of Payments (Billions of dollars) Current Accounts U.S. merchandise exports +70 U.S.…

A: The international transactions are tracked by the balance of payment. It includes both current and…

Q: Explain why the Cedi continues to depreciate against most major international currencies.

A: Currency depreciation is the decrease in the value of a country's currency in relation to one or…

Q: Nigeria has a positive trade balance of $10 billion. If it has a negative balance of services of $8…

A: Balance of trade is the difference between the country's exports of goods and services and the…

Q: Display graphically changes in the value of domestic currency, if the domestic price level remains…

A: If the domestic price level remains constant in domestic country and increases in other countries…

Q: Assume the United States has a trade surplus with Brazil and imposes new tariffs on Brazilian…

A: A tariff of coffee imported from Brazil will increase US domestic price of coffee. At higher price,…

Q: Nigeria has a positive trade balance of $10 billion. If it has a negative balance of services of $8…

A: Balance of trade is otherwise called net export, trade balance, or global trade balance.

Q: 10) When policy makers decide to revalue the currency, such an action generally represents A) an…

A: When there is revaluation in the currency of the country, the fixed exchange rates brings such a…

Q: Explain why the U.S. demand for Mexican pesos is downward-sloping and the supply of pesos to…

A: When the peso depreciates, Mexican products and services are less costly and more consumed by the…

Q: Display graphically changes in the value of domestic currency, if the domestic price level increases…

A: Price level tells us the average price of all goods and services of a country.

Q: Exports contracts are denominated in national currency. Imports contracts are denominated in.…

A: The exchange rate refers to the rate at which one currency of a country can be exchanged for for a…

Q: Assume the following to be true in Turkey Exports contracts are denominated in foreign currency.…

A: A decline in the value of the domestic currency with respect to foreign currencies can be defined as…

Q: What impact will an appreciation of the dollar have on the relative price of foreign goods to…

A: If the dollar appreciates, then the exchange rate increases. The relative price of domestic goods…

Q: Define purchasing power parity. What is the importance of purchasing power parity when you are…

A: Purchasing Power Parity(PPPs) are the currency conversion rates that try to equalize the purchasing…

Q: Briefly define the current account, capital/financial account and official settlements account of a…

A: Balance of payment is the accounting records of all monetary transaction occured between nations .…

Q: Exports contracts are denominated in foreign currency. Imports contracts are denominated in. foreign…

A: Devaluation means the official reduction in the external value of the domestic currency in terms of…

Q: Other fundamental things equal, a decrease in the exchange rate value of the domestic currency will…

A: An Exchange Rate(ER) is the value of the currency of a nation with the currency of another nation or…

Q: -What's the required condition for a country's Current Account Balance to improve after the…

A: When there is a devaluation of the currency, then immediately the imports of the country becomes…

Q: The shape of the curve that shows the effect of a currency depreciation upon a country's current…

A: According to Marshall Lerner condition, the devaluation (or depreciation) of country currency will…

Q: consumer spending reached record highs in 2021 coming out from the covid-19 slump. It is expected…

A: *Answer :-  * Increase in import of services and consumption goods will lead to increase in demand…

Q: Suppose the increase in tariffs on goods and services from China and European Union countries caused…

A: Capital flight refers to the outflow of capital from the domestic economy to the another economy.

Q: exports contracts are denominated in foreing currency imports contracts are denominated in foreing…

A: Trade balance is obtained from difference of a country's exports and imports. Trade balance =…

Q: Suppose a country has an overall balance of trade so that exports of goods and services equal…

A: The trade balance is the difference between value of export and import of goods and services of…

Q: explosion of education levels causes Europeans' incomes to increase. How would this event impact the…

A: Money supply implies to the aggregate volume of currency held by the public at a particular point in…

Q: When you write an exchange rate in terms of how many units of a foreign currency it takes to buy one…

A: A direct quote depicts the amount of foreign currency that can be bought for a certain unit of the…

Q: Exhibit 9- Foreign exchange market for U.S. dollars and British pounds. Picture attached Which of…

A: In the exhibit we see that the demand for dollars is decreasing and the supply is increasing. This…

Q: If the U.S. dollar depreciates 20 percent, how does this affect the export and domestic sales of a…

A: Currency depreciation is a decrease in the currency's value. Due to factors such as economic…

Q: What could importers such as the Chinese airlines have done to limit the negative impact of a…

A: A reduction within the value of a currency in terms of its rate versus other currencies is…

Q: Explain why the U.S. demand for Mexican pesos is downward-sloping and the supply of pesos to…

A: In international economic transactions, the exchange rate is used to determine the price of a…

Q: An increase in the value of domestic currency in terms of foreign currencies under fixed exchange…

A: According to the given question In simple words we can say that a foreign exchange rate it is…

Q: The U.S. dollar exchange rate increased from $0.96 Canadian in June 2011 to $1.03 Canadian in June…

A: Currency appreciation is an increase in the value of a currency with respect to other foreign…

Q: Suppose the French suddenly develop a strong taste for California Coca-Cola. Answer the following…

A: a) If the French suddenly develops a strong taste for California’s Coca-Cola, so the demand for the…

Q: What is the nation’s trade balance on its current account and capital account given the following…

A: Balance of payment is a record of the monetary transactions made between the home country with rest…

Q: Why the aggregate demand curve slopes downward The following graph shows the aggregate demand…

A:

Q: Foreign exchange rates refer to the   price at which purchases and sales of foreign goods take place…

A: Answer: (1). Correct option: (c) price of one nation's currency in terms of another nations'…

Q: An appreciation of the exchange value of the U.S. dollar would: A) increase the dollar prices of…

A: The value of a country's currency in relation to the currency of another country or economic zone is…