If in an economy, there are no supply shocks and expected inflation is 5% over the next. year. Determine the inflation rate that is depicted by the short run Phillips curve at the natural rate of unemployment? a) 0%. b) Between 0% and 5%. c) Over 5% d) 5%
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- The Grubel-Lloyd index is used to measure the degree of intra-industry trade, Interpret what an index of zero (0), one (1) and zero to one (0 < GL > 1) indicate.Assume you are a trader with Deutsche Bank. From the quote screen on your computer terminal, you notice that Dresdner Bank is quoting EUR/USD at 1.2459 and Credit Suisse is offering USD/CHF at 0.8850. You learn that UBS is making a direct market between the Swiss franc and the euro, with a current EUR/CHF of 1.1048. (Ignore bid-ask spreads for this problem.) Assume you have $5,000,000 with which to conduct the arbitrage. What is the EUR/CHF rate that eliminate triangular arbitrage? (X.XXXX)Considering the investment skill of sector rotation, one industry is defined as defensive or aggressive based on its sensitivity to ( ). A interest rate change; B fiscal policy;C exchange rate volatility; D business cycle; E total market volatility. (Many answers are valid)
- The following table indicates the unit prices (in Rands) and quantities of three goods held in the national warehouse of a DIY (“do it yourself”) store for the years 2020 and 2021. Item 2020 2021 Unit Price (p0) Quantity (q0)) Unit Price (p1) Quantity (q1) Mineral spirits R23.70 30 R27.70 45 10mm spanner R49.00 60 R65.00 50 25mm brush R58.00 30 R63.00 40 Q.8.1 Using 2020 as the base year, compute the price relatives in 2021 for the 10mm spanner and the 25mm brush. Interpret your answers. (8) Q.8.2 Again, using 2020 as the base year, compute the Paasche price index for all of the items for 2021. Interpret your answer.7 has globalization changed given the current situation we are experiencing due to COVID-19? please explain your reasoning in detail.Are the CAD and the CAB the same solution ($200 billion)? Is $200 billion also the trade balance in the first question?
- Cherryland, an imaginary country somewhere in the world invests heavily in government and corporate securities of the United States. In addition, Americans invest heavily in Cherryland. Approximately $10 billion worth of investment transactions occur between these two countries each year. On the other hand, the total dollar value of trade transactions per year is about $50 million. This information is expected to hold also in the near future.Because most of your firm’s exports goes to Cherryland, your job as international cash manager requires you to forecast the fluctuations in the value of the “cherrio”, the currency of Cherryland, with respect to the U.S. dollar. Questions:1) Explain how each of the following scenarios, holding other things equal, will affect the value of the cherrio.Scenarios:a. U.S. inflation has suddenly increased substantially, while inflation in Cherryland remains low.b. Real interest rates have increased substantially in the U.S.; while real interest rates in…Read the following extract and answer question? SA agri posts trade surplus in Q2 despite ongoing Covid challengesThe agriculture sector was able to operate during the various lockdown periods due to it being considered an essential service. Weather also came to the party and allowed for an excellent agriculture season which sawrecord crops across most commodities with the grain and oilseed crop topping 17.07m tonnes which is almost 2% higher year-on-year.Despite logistical challenges, the sector managed to move hefty quantity of produce to the rest of the world with the second quarter of 2021 recording a trade surplus of US$1.5m which is 40% ahead of the same period in2020. Then follows a 36% year-on-year spike in total agriculture exports in quarter two of 2021 at US$3.2bn, bringing the total 1H2021 export value to US$6.1bn which is 30% higher year-on-year…The overall good export revenue was underpinned by strong export demand despite the Q2 Rand exchange rate appreciation of 6%…Read the following extract and answer question?SA agri posts trade surplus in Q2 despite ongoing Covid challengesThe agriculture sector was able to operate during the various lockdown periods due to it being considered an essential service. Weather also came to the party and allowed for an excellent agriculture season which sawrecord crops across most commodities with the grain and oilseed crop topping 17.07m tonnes which is almost 2% higher year-on-year.Despite logistical challenges, the sector managed to move hefty quantity of produce to the rest of the world with the second quarter of 2021 recording a trade surplus of US$1.5m which is 40% ahead of the same period in2020. Then follows a 36% year-on-year spike in total agriculture exports in quarter two of 2021 at US$3.2bn, bringing the total 1H2021 export value to US$6.1bn which is 30% higher year-on-year…The overall good export revenue was underpinned by strong export demand despite the Q2 Rand exchangerate appreciation of 6%…
- Read the following extract and answer question?SA agri posts trade surplus in Q2 despite ongoing Covid challengesThe agriculture sector was able to operate during the various lockdown periods due to it being considered an essential service. Weather also came to the party and allowed for an excellent agriculture season which sawrecord crops across most commodities with the grain and oilseed crop topping 17.07m tonnes which is almost 2% higher year-on-year.Despite logistical challenges, the sector managed to move hefty quantity of produce to the rest of the world with the second quarter of 2021 recording a trade surplus of US$1.5m which is 40% ahead of the same period in2020. Then follows a 36% year-on-year spike in total agriculture exports in quarter two of 2021 at US$3.2bn, bringing the total 1H2021 export value to US$6.1bn which is 30% higher year-on-year…The overall good export revenue was underpinned by strong export demand despite the Q2 Rand exchangerate appreciation of 6%…The current spot exchange rate between Swiss franc and the U.S. dollar is $1.077/SF and the three-month forward rate is $1.1334/SF. The speculator believes that in three months the spot rate will be $1.120/SF. Explain how the speculator with 1,000.000$ (one million U.S. dollars) should speculate in the forward market and calculate the profit to be made. Please provide a full explanation.what mechanisms should be used to ensure the integrity of traders in the trading function