Given the demand and supply curves for dollars (in terms of the South African rand) in the foreign exchange market. The outbreak of the Corona virus causes the South African Rand to: Select one: a. Depreciate as the supply curve of USD shift to the left b. Appreciate as the demand curve for USD shift to left c. Depreciate as the supply curve of USD shift to the right d. Appreciate as the demand curve for USD shift to right e. Remain the same Reason:

Given the demand and supply curves for dollars (in terms of the South African rand) in the foreign exchange market. The outbreak of the Corona virus causes the South African Rand to: Select one: a. Depreciate as the supply curve of USD shift to the left b. Appreciate as the demand curve for USD shift to left c. Depreciate as the supply curve of USD shift to the right d. Appreciate as the demand curve for USD shift to right e. Remain the same Reason:

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter19: The International Monetary System: Order Or Disorder

Section: Chapter Questions

Problem 8DQ

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Given the demand and supply curves for dollars (in terms of the South African rand) in the foreign exchange market. The outbreak of the Corona virus causes the South African Rand to: Select one: a. Depreciate as the supply curve of USD shift to the left b. Appreciate as the demand curve for USD shift to left c. Depreciate as the supply curve of USD shift to the right d. Appreciate as the demand curve for USD shift to right e. Remain the same Reason:
The figure shows the market for the British pound £, as the foreign currency for Japan, whose own currency is the yen, ¥. Which of the following changes would cause the demand for pounds to shift to the right, as shown? E=¥/£ E, E, `D. British aid to Japan after a Japanese earthquake. The sale of a Japanese company to a British investor. A fall in the interest rate on bonds in Japan. O An increased British demand for Japanese cars.
Please show all arithmetic leading to your answer. Please select the appropriate multiple choice answer. Consider two countries, Domestic and Foreign, in the short run. In the short run, suppose that Domestic lowers its money supply and Foreign increases its money supply. A. The number of Domestic dollars needed to buy one Foreign dollar will fall. B. The number of Domestic dollars needed to buy one Foreign dollar will rise. C. The number of Domestic dollars needed to buy one Foreign dollar may rise or fall.
Please label your answers to the following questions clearly. (a) Outline two factors that affect the demand for a currency and two factors that affect its supply. (b) Imagine that the diagram below respresents the market for the Australian Dollar. Refer to this diagram in explaining what would happen to the value of the Australian Dollar if Australia suddenly experienced an increase in its inflation rate relative to that of its trading partners. ER SAUD ER, DAUD Quantity of AUD
01. True or False: The supply schedule of yen has a positive-sloping region, which corresponds to the inelastic region on the Japanese demand schedule for foreign currency.
Q6. suppose Indonesian suddenly develop a strong taste of Kelantan Batik. Answer the following question in word and diagram . a) What happens to the demand for ringgit in the market for foreign-currency exchange? b) What happens to the value of ringgit in the market for foreign-currency in exchange?
Which of the following statements is true? ohe demand for foreign currency in the United States increases as the volume of imports increases O The demand for foreign currency in the United States increases as the volume of exports increases O The demand for toreign currency in the United States decreases with a decrease in the inflation rate abroad. O The demund for foreign currency in the United States decreases as foreign interest rates rise O The demand for foreign currency in the United States is unaffected by U.S. demand for foreign goods and services
Suppose that the FED decreases the required reserve ratio. How will this affect the exchange market for U.S. dollars? Explain/show the effect(s) of this move by the FED. Include the initial effect(s), the market adjustment(s), and the final result(s) on equilibrium. Suppose that the following exchange rates are current: 1 US$ = 61.42 Indian Rupees, 1 Japanese Yen = 0.57 Indian Rupees, and 1 US$ = 107.5 Japanese Yen. Calculate the shadow price between Rupees and Yen. Using $1,000 and triangular currency arbitrage, make three trades and calculate the profit earned.
The graph below shows the exchange market for U.S. dollars with respect to the Chinese yuan, with three different exchange rates noted. Which of the following could describe the current situation in this market, based on the observation in class that the Chinese money supply has been growing due to their failure to sterilize? yuan/S Ss R3 R2 R1 `Ds Os O The exchange rate is R1 and the Chinese are adding to their international reserves O The exchange rate is R2 and the Chinese are neither gaining nor losing international reserves. The exchange rate is R3 and the Chinese are adding to their international reserves O The exchange rate is R3 and the Chinese are losing international reserves.
There is trade between the U.S. (domestic country) and Great Britain (foreign country) and the quantity of pounds supplied is positively related to the exchange rate. The exchange rate is defined as the domestic currency price of the foreign currency, i.e., dollars per pound. Using clearly labeled graphs of demand for and supply of the foreign currency, show and explain what will happen to: (i) the demand for pounds and/or; (ii) the supply of pounds; and (iii) the value of the dollar against the pound as a result of each one of the following changes. (a) a decrease in tariffs in the Great Britain. (b) a decrease in prices of goods produced in China. Both the U.S. and Great Britain trade with China. (c) a decrease in interest rates in the U.S
QUESTION 8 Imagine the following scenario: The central bank of Neverland ensures that the exchange rate between the Neverland dollar and the U.S. dollar is fixed. Due to a global financial crisis the demand for U.S. dollars goes up and the demand for Neverland dollars goes down. First, the Neverland's central bank spends U.S. dollar reserves to support the peg but then it runs out of reserves. What is most likely to happen next? O A. the Neverland dollar's exchange rate with respect to U.S. dollar (i.e., the price of Neverland dollars in U.S. dollars) will go up O B. the Neverland dollar's exchange rate with respect to U.S. dollar will go down OC. the Neverland dollar's exchange rate with respect to U.S. dollar will not change O D. the stock market index of the Neverland stock exchange will go up
Suppose the exchange rate between the Mexican peso and the U.S. dollar is 12 MXN = $1 and the exchange rate between the Hungarian forint and the U.S. dollar is 215 FNT = $1.a. Express both of these exchange rates in terms of dollars per unit of the foreign currency.b. What should the exchange rate be between the Mexican peso and the Hungarian forint?