ive recommendation on how to manage exchange rates

Q: Data from The Economist BigMac index from January 2022 shows that the local price of a Big Mac in…

A: Purchasing Power Parity  The Theory of Purchasing power compares the currencies of Different…

Q: How does balance of payment surplus increases employment and standard of living, promotes investment…

A: The balance of payments is a sheet of transactions made by a country to the rest of the world during…

Q: what excactly is a fixed exchange rate and give an example of a country that has a fixed exchange…

A: "The rate at which one country's money is exchanged for another country's currency is known as the…

Q: What is Purchasing power parity Theory.

A: the Purchasing Power Parity (PPP) is an estimation that economists specialists use to look at the…

Q: Please explain flexible and fixed exchange rates. Show ways to maintain a strong or a weak currency

A: Flexible exchange rate A flexible exchange rate, also known as a floating exchange rate, fluctuates…

Q: Discuss why the demand and/or supply of a currency would shift, and the impact this would have on…

A: The open economy macroeconomics mainly deals with the change in the exchange rates. The change in…

Q: Using Diagrams show the impact on a country’s exchange rate when: a. Rise in the domestic price of…

A: a. Rise in the domestic price of exports will increase the export as they are getting higher prices.…

Q: Briefly describe the Philippines condition from its neighboring Asian countries in terms of exchange…

A: Exchange rate: An exchange rate measures the value of a country's currency in comparison to the…

Q: now how to demonstrate movements of exchange rates using supply and demand graphs

A: The currency rate swings from day to day in this system due to market forces of demand and supply.

Q: INSTRUCTIONS: For each of the following, explain the effect on a) current account OR capital account…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: What determines the value of a currency in the flexible exchange rate system ?

A: The exchange rate is the value of one country’s currency to the value another country’s currency.

Q: What is the relation between exchange rate and balance of payments .         -Appreciated currency…

A: BOP is a statement comprising of all the transactions between individuals of a country with the…

Q: Discuss what the interest rate parity (IRP) tells us about forecasting future spot exchange rates.

A: Interest rate parity (IRP) refers to the theory according to which the interest rate differential…

Q: What is an exchange rate and why would a government want to maintain a fixed exchange rate?

A: Exchange Rate can be defined as expressing one currency in the terms of another currency. For…

Q: Using the concept of "carry trade," explain how a decrease in U.S. interest rates could affect the…

A: Carry trade is a strategy when the funds are withdrawn from the country with low rate of interest…

Q: Q. Find any three saarc countries, Calculate effective exchange rate too.

A: South Asian Association for Regional Cooperation (SAARC)  founded in 1985.  Effective exchange rate…

Q: Explain the factors that might cause a country’s exchange rate to depreciate.

A: A fall in the conversion scale/exchange rate is known as a depreciation in the conversion scale. It…

Q: Elaborate the concept of Balance of Payments. Discuss its different accounts briefly.

A: Balance of payment (BOP) refers to the financial statement of all the transaction of a country with…

Q: he NEWS magazine uses the price of a Mercedes Benz A-class to determine whether a currency is…

A: When different countries' currencies are compared using the basket of goods approach it is called…

Q: How much is the difference between the cross-exchange rates for Rupees (India) and Euro (europe)…

A: A cross rate is a quote on the foreign exchange market between two currencies (not including the US…

Q: What is balance of visible items in the balance of payments account called?

A: The balance of payments account of any country contains a number of components like balance of…

Q: how might changes to the exchange rate flow through to the domestic economy? what is Y-A = X-M?

A: The Elasticity approach is related to price effect of devaluation. This approach analyses the…

Q: How can a country fix its exchange rate to another? Is it sustainable for them to maintain it fixed?

A: The regime where the government fixes its exchange rate(e) with other country is called ‘Fixed…

Q: If American auto companies make a breakthrough inautomobile technology and are able to produce a…

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

Q: ch one iS king or (a) Fixed exchange rate (b) Flexible exchange rate c) Both (a) and (b) d) None of…

A: According to the given question the king of the exchange rate is the OPTION(C) IS THE CORRECT ANSWER…

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: What is interest rate parity? Is it a reasonable assumption that interest rate parity holds between…

A: The theory of interest rate parity (IRP) can be explained as a fundamental analysis that helps in…

Q: What is a flexible exchange rate and how does it work?   What is a crawling peg and how does it…

A: The flexible exchange rate refers to the exchange rate of a country set in the international market…

Q: What is interest rate parity? Is it a reasonable assumption that interest rate parity holds between…

A: What is interest rate parity? Is it a reasonable assumption that interest rate parity holds between…

Q: Explain the determinants of a nation's foreign exchange rate.

A: A nation's foreign exchange rate is between two currencies. Basically, "trade rates are how much one…

Q: What is the current system of exchange rates? explain

A: There are three types of exchange rate: Fixed exchange rate: This implies when the value of one…

Q: If a country that fixes its exchange rate increases its money supply, then its currency will become…

A: In the fixed exchange rate system, any change in money supply will lead to affect the value of…

Q: Consider the following information about a small open economy: Y=1000; C=100+.75(Y-T); I=100-5r;…

A: Answer: Given, Y=1000;C=100+.75(Y-T);I=100-5r;G=100;T=100;NX=250-16E;r*=4. At equilibrium,…