Pls select the correct option and explain it in 7-8 sentences. 4. If a central bank of a country is trying to peg the exchange rate (i.e., domestic price of the foreigncurrency) below the equilibrium (e, on the graph below) that would prevail if there were nointervention in the currency market , thenwe might figure that they are doing this because they want to promote their exports.the domestic central bank of this country would see a decrease in its reserves of the domestic currency,ceteris paribus.the domestic central bank of this country would see a decrease in its international reserves, ceteris paribus.the domestic bank would have to buy the excess supply of the foreign currency.none of the other options.

The exchange rate is the rate at which one currency would be exchanged for another currency. The…

Answered: Pls select the correct option and…

Business

Economics

Pls select the correct option and explain it in 7-8 sentences.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 9PA

See similar textbooks

Related questions

Q: Suppose Ryan and Rita were randomly shown the numbers 68 and 21, respectively, and then asked to…

A: Suppose Ryan and Rita were randomly shown the numbers 68 and 21 respectively and then asked to…

Q: Katya needs 6 hours to knit a scarf and 7 hours to knit a hat. Andreas needs 3 hours to knit a scarf…

A: For Katya, Opportunity cost of producing hats = 76 = 1.17 unit of scarfFor Adreas, Opportunity cost…

Q: What is the supportive explanation that shows lockdown is the best decision have been made compared…

A: There are some supportive explanation in favor of lockdown during pandemic: 1.There is risk involved…

Q: Find EMV and recommend the course of action Find the EMV under certainty Use the EVC to find the…

A: Expected Monetary Value (EMV) is the expected value of an investment alternative for its given…

Q: In experimental studies, most participants adhere to the tenets of utility maximi: ation theory,…

A: Individuals and organizations strive for the maximum amount of enjoyment from their economic…

Q: 4. Recall inequality aversion model to explain social preference: There are two players, A & B. They…

A: We need to calculate the payoffs using all the information given. Note that xA and xB are chosen by…

Q: Let U(A,)=20 , U(A2)=1000 .If A3 lies between A1, A2 in the preference scale/ranking ,ask the…

A: Given: U(A1) = 20 U(A2) = 1000 For A3 to be indifferent with (P, A1, A2) U(A3) = pU(A1) + (1-p)…

Q: Q.4 Graphically illustrate Compensating vaniation and equivalent variations.

A: Compensating variation (CV) is the adjustment in income which returns the consumer to original…

Q: Suppose Jessica has two choices: receive $12000 and 30 utils or take a gamble that has a 55% chance…

A: Utility denotes the satisfaction that the consumer derives when he/she purchases and uses a good or…

Q: How do we measure utility? Are interpersonal (i.e. between people) comparisons valid? Why or why…

A: The measure that depicts the benefit or satisfaction that is being received by individual due to the…

Q: How would you test the presence of multicollinearity?

A: Independent variables in a regression model are when found correlated, is known as…

Q: The Minister of Transport released its Festive season road accident statistics which shows that the…

A: Consumer theory is about maximizing utility, given the price of goods and services and the income of…

Q: Suppose Diane's utility function is U=VIncome . Diane earns an income of 00, but there is a 15%…

A: The premium of insurance is decided based on the expected values.

Q: Which of the following is a significant difference in the outcomes between the dictator game and the…

A: When talking about game theory, it can be said that ultimate game and dictatorship game are related…

Q: 9 family orders one pizza to be shared exclusively. gets a fraction S₁ Suppose a by their two…

A: Utility of Child 1 : U(S1 ) = S1 Utility of Child 2 : U (S2) = 3S2 Utility maximizing point is…

Q: of drivers committing an accident is 8% with utility , where H stands for year income. The Minister…

A: Given, the Utility function. U = H Probability of accident P = 8% Cost of the Accident ( C ) =…

Q: Situation A: If a person lives for 3 years with a disease and the current standard of care for that…

A: We are going to use concepts such Quality adjusted life years to solve this question.

Q: if the child buys either chocolates or hard candies one piece at a time, what will be his first two…

A: In economics, utility refers to the entire pleasure derived from the consumption of an item or…

Q: i. Q = K² + 5KL – 4L² ii. Q = 13KŠL ner has the following utility function = Ax“yß

A: For finding homogeneity, we need to multiply the given factors by λ (lambda). And then we will check…

Q: 6.8 (0) Casper consumes cocoa and cheese. He has an income of $16. Cocoa is sold in an unusual way.…

Q: Assume that there are two parties, I and V. I engages in an activity that tends to injure V. V and…

A: The Nash equilibrium in the economy can be obtained at the point where the two players in the…

Q: Suppose a consumer has S100 today and he tells you he is willing to wait X amount of time for…

A: Temporal discounting refers to the behavior of consumers under which they allocate a relative…

Q: Because Income depends on work effort and work effort depends on nutrition, suppose the relationship…

A: Because Income depends on work effort and work effort depends on nutrition, suppose the relationship…

Q: The Minister of Transport released its Festive season road accident statistics which shows that the…

A: Given: The utility function: U H = H The probability of an accident is = 8% The road accident cost…

Q: Suppose that there is a 10% chance Ja'Marr is sick and earns $10,000, and a 90% chance he is healthy…

A: There is a 10% probability of earning 10000 and 90% probability of earning 70000 P1= 0.1, P2= 0.9…

Q: Exercise 2. In order to encourage energy conservation, many public utility companies charge…

A: Budget constraint represents the combination of the goods which can be consumed at a given price and…

Q: If we observe a consumer choosing (x1, x2) when (y1, y2) is available one time, are we justified in…

A: The consumer is choosing the basket (x1,x2) when (y1,y2) is available only ONE time. The word “one”…

Q: Isabella understands that if she were to play golf, she would be able to spend time outdoors (where…

A: Expectancy theory is also known as expectancy theory of motivation and. Individual act as epr their…

Q: C) Find lim F(x), lim F(x), and lim F(x), whichever exist. x→10- x→10* x→10 Find lim F(x). Select…

A: For the left-hand limit to exist for a function, f(x) as x approaches the value of a number let's…

Q: A health economist is conducting the analysis and making a choice between the following two choices:…

A: The following problem has been solved as follows:

Q: Brett is trying to decide between two insurance plans. The first plan has a $0 deductible, a 50%…

A: A deductible is the smallest amount that a person must pay before receiving insurance coverage.…

Q: Linda has a chronic illness that requires two medications: Xolophyl (X) and Ysplinti (Y). She needs…

A: Given that :Two good : aolophyl (X) and ysplinti (Y)Price of X and Y are Px and Py…

Q: Assume that there are two parties, I and V. I engages in an activity that tends to injure V. V and…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…

Q: percep

A: Deception is being defined as an untrue falsehood, or the act of in turn lying to or to trick…

Q: You conduct a study in which you am to determine which factors contribute sgnificantly to workplace…

A: The problem of multicollinearity arises when two or more variables are highly linearly related. The…

Q: Mete is Esra's boyfriend. Esra is expecting a marriage proposal from Mete. Today is Sunday. Mete…

A: Mete has given the following hints to Esra : (1) The day and time of proposal - he is going to…

Q: Vilfredo has complete and transitive preferences on cars. We know that he prefers a Hyundai Sonata…

A: Completeness of preferences mean that if a person is making a choice between two or more goods then…

Q: When Matt is buying cards and toys (C, T), his preferences are well behaved and he is indifferent…

A: So if the consumer has well behaved preference, his indifference curves are convex to the origin.…

Q: Question 4 Suppose that there is a 10% chance Ja'Marr is sick and earns $10,000, and a 90% chance he…

A: There is 10% probability that income is 10000 and 90% probability that income is 70000

Q: Assume that there are two parties, I and V. I engages in an activity that tends to injure V. V and I…

A: Hello, thank you for the question. Since there are multiple subpart questions posted here, only the…

Q: An individual has the following utility function u(w)=2w05 +10 using the expected utility, order the…

A: The expected utility mainly refers to the expected utility which involves the expected or the…

Q: Because Income depends on work effort and work effort depends on nutrition, suppose the relationship…

Q: other best example of contingency planning about turnover of employees

A: An contingency planing is an arrangement formulated for a result other than in the typical…

Q: It is sometimes said that, "Those who gamble the most are the ones who can least afford to lose."…

A: Those who gamble the most are the ones who can least afford to lose." these people gamble because…

Q: another new medicine (Medicine B) prolongs the patient’s life by 2 years, at a utility level of 0.7,…

A: Formula: QALY = utility gained * year of life.

Q: If MUƏ/Pa = 150/$40 = MU/Pb = 120/? = MUdPc= 330/?, the prices of products B and C in consumer…

A: The consumer equilibrium is the situation where it maximizes its utility. The utility is the power…

Question

Pls select the correct option and explain it in 7-8 sentences.

4. If a central bank of a country is trying to peg the exchange rate (i.e., domestic price of the foreign
currency) below the equilibrium (e, on the graph below) that would prevail if there were no
intervention in the currency market , then
we might figure that they are doing this because they want to promote their exports.
the domestic central bank of this country would see a decrease in its reserves of the domestic currency,
ceteris paribus.
the domestic central bank of this country would see a decrease in its international reserves, ceteris paribus.
the domestic bank would have to buy the excess supply of the foreign currency.
none of the other options.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Property Rights, Bargaining And The Coase Theorem

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

If a countrys currency is expected to appreciate in value, what would you think will be the impact of expected exchange rates on yields (e.g., the Interest rate paid on government bonds) in that country? Hint: Think about how expected exchange rate changes and interest rates affect a currencys demand and supply.
Suppose that political unrest in Egypt leads financial markets to anticipate a depreciation in the Egyptian pound. How will that affect the demand for pounds. supply of pounds, and exchange rate for pounds compared to, say, U.S. dollars?
This chapter has explained that one of the most economically destructive effects of exchange rate fluctuations can happen through the banking system, if banks borrow from abroad to lend domestically. Why is this less likely to be a problem for the U.S. banking system?
Does a higher rate of return in a nations economy, all other things being equal, affect the exchange rate of its currency? If so, how?
How would a contractionary monetary policy affect the exchange rate, net exports, aggregate demand, and aggregate supply?