Other things the same, as the price level falls, a country’s exchange rate   and interest rates rise. and interest rates fall. falls and interest rates rise. rises and interest rates fall.

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: How are both the real interest rate, r, and the real exchange rate, Q, actually determined?

A: The inflation rate is the difference between the actual and nominal interest rates. (The nominal…

Q: If the Chinese nominal exchange rate (foreign currency per Chinese Yuan) does not change, but prices…

A: Given that Chinese nominal exchange rate does not change, but prices rise slower in China than in…

Q: China announces that it will devalue the yuan in one week. How will the equilibrium in the foreign…

A: Foreign exchange manifests a market where people(firms and households) trade currencies at a…

Q: Draw a graph with the exchange rate (RM/$) on the Y-axis and the quantity of US dollars on the…

A: In the flexible exchange rate system, the demand and the supply of currency in the foreign exchange…

Q: In the foreign exchange​ market, when the U.S. interest rate​ rises, the supply of dollars​ ________…

A: Answer: Option A  (decreases; rises) Explanation: When the U.S. interest rate rises investors will…

Q: If the U.S. interest rate rises, the exchange rate value of the dollar ________ and net exports…

A: Net exports, the difference between exports and imports depend on exchange rate. Appreciation…

Q: The figure above illustrates the U.S. foreign exchange market. Illustrate how the exchange rate…

A: In the international market, the exchange rate of a currency depends upon various factors such as…

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: A country has a fixed exchange rate and capital is very mobile.  Because it is experiencing high…

A: In the international market, countries use two different approaches to set the value of their…

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: In 2018, in the United States the sum of the balance of all three of the balance of payments…

A: In 2018, in the United States the sum of the balance of all three of the balance of payments…

Q: How do wars and pandemics affect a country's nominal exchange rate, interest rate, and production?

A: The nominal exchange rate basically determines that how much local money is required to acquire…

Q: Find the value of balance of trade when the value of exports are $16 and value of imports are $11?

A: As per the question, Value of Exports are = $16 Value of the imports = $11 Balance of trade = ?

Q: Consider the exchange rates of U.S. dollars to yen. Using figures, explain the following: 1.…

A: The price of a country's currency in relation to another country's currency is known as the exchange…

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: An economy is described by the following two equations.       Y = C (Y – T) + I (r* ) + G –…

A: Y = C (Y – T) + I (r* ) + G – NX(e) The above model depicts the aggregate demand in an economy. It…

Q: If the exchange rate were fixed rather than floating, explain what would happen to The trade…

A: Goods market equilibrium, IS curve: Y = C (Y – T) + I (r* ) + G – NX(e) Money market equilibrium, LM…

Q: What are the three categories of transactions in the balance of payments? Give an example of each.

A: The balance of payments is considered to be a systematic record of all the transactions of a country…

Q: An increase in the interest rate causes investment to

A: ‘Exchange rate’ is the rate at which a country's ‘currency’ can be traded with another country.…

Q: Please provide a short and concise answer to the following question: Why are exchange rates…

A: Exchange rate is the rate at which nation's currency are exchanged . Foreign exchange is used to…

Q: Consider the foreign exchange market. Suppose there is an increase in domestic income. Then, the…

A: Answer 1- Expanding terms of career expos' more noteworthy interest for the nation's products. This,…

Q: Variations in the foreign exchange rate can impact on the profitability of business. Explain what…

A: Exchange rate fluctuations impact trade and businesses in various ways. The nominal exchange rate is…

Q: An increase in the interest rate causes investment to rise and the exchange rate to appreciate. rise…

A: If the interest rates rise relatively in home country as compared to elsewhere, it'll become more…

Q: How can a surge in exports and decrease in imports cause an increase in aggregate demand and what…

A: Aggregate demand is defined as the total demand of all final commodities and services at a given…

Q: In the international trade, exchange rate might affect export and import. Explain briefly how the…

A: Answer to the question is as follows:

Q: A country utilizes a fixed exchange rate. If the central bank were to increase the money supply,…

A: Under the fixed exchange rate system, the one currency is fixed against other currency. The value of…

Q: If the central bank raises interest rates it will A) lower aggregate demand and raise the…

A: " Aggregate demand reflects the relationship between price level and total number of all the final…

Q: Give an example of how a change in the exchange rate alters the relative price of domestic goods in…

A: Exchange rate: - the exchange rate is the rate at which the currency of one country can be exchanged…

Q: Draw graphs to show the effect of expansionary fiscal and monetary policies on the economy under…

A: Robert Mundell and Fleming wrote the theorem when there was a fixed exchange rate system. The model…

Q: Explain why a country with fixed exchange rate and open financial markets has to give up its…

A: The theory that depicts that countries might tend to choose among options while making decisions…

Q: What is the structure of the exchange rate mechanism in US and Thailand? Please explain.

A: The way in which the governments could tend to influence in forex markets the relative price levels…

Q: Find the value of balance of trade if the value of exports are $61 and the value of imports are $8?

A: The value of a nation's export and import depend on the exchange rate of the domestic currency in…