Quantity of CS exchanged Suppose Canadian and US interest rates are both increasing. If US rates are increasing faster than Canadian rates, where is the new equilibrium on the graph?
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- On June 23, 2016, voters in the United Kingdom votedto leave the European Union. From June 16 to June 23,2016, the exchange rate between the British pound andthe U.S. dollar increased from 1.41 dollars per pound to1.48 dollars per pound. What can you say about marketexpectations regarding the result of the referendum?Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the economy of this country in billions of dollars, where C is consumption, DI is disposable income, I is investment, and G is government purchases: C� = = 30+0.8×DI30+0.8×DI G� = = 5050 I� = = 6060 Initially, this economy had a lump sum tax. Suppose net taxes were $50 billion, so that disposable income was equal to Y – 50, where Y is real GDP. In this case, this economy's aggregate output demanded was ___________ . Suppose the government decides to increase spending by $10 billion without raising taxes. Because the spending multiplier is ____________ , this will increase the economy's aggregate output demanded by ____________ . Now suppose that the government switches to a proportional tax on income of 10%. Because consumers retain the remaining 90% of their income, disposable income is now equal to 0.90Y. In this case, the economy's aggregate output…A decrease in the German demand for American-made goods will Group of answer choices all of these increase the demand for dollars in the foreign exchange market. not change the demand for dollars in the foreign exchange market. decrease the demand for dollars in the foreign exchange market.
- Suppose Americans suddenly develop a strong taste for Canadian whiskey. a.) What happens to the demand for Canadian dollars in the foreign exchange market? b.) What happens to the value of Canadian dollars in the foreign exchange market? What about U.S. dollars? c.) What happens to the quantity of net exports in Canada, other than whiskey, as a result of your answer in part b? What about the U.S.?An expected decline in demand for consumer goods in the U.S. means there will be less imports into the U.S. Less imports in the U.S. translates to a reduction in exports from China, which is significant as the U.S. has the largest GDP of all nations. As the U.S. is reducing imports, it will be purchasing less goods from China, which means the U.S. will be giving up less dollars to purchase Chinese goods with the yuan. Will a decline in demand for consumer goods in the U.S. impact China's economy given the above information? If so, how would that affect the dollar-yuan exchange rate?What is bought and sold in the foreign exhange market?
- Suppose Americans suddenly develop a strong taste for Canadian whiskey. What happens to the demand for Canadian dollars in the foreign exchange market? What happens to the value of Canadian dollars in the foreign exchange market? What about U.S. dollars? What happens to the quantity of net exports in Canada, other than whiskey, as a result of your answer in part b? What about the U.S.?Japan and the United States are major trading partners and the exchange rate between the Japanese yen and the United States dollar is determined in a flexible foreign exchange market. (a) Assume real income increased in the United States. Draw a correctly labeled graph of the foreign exchange market for the yen, and show the effect of the increased real income in the United States on the equilibrium exchange rate for the yen.Assume that you are studying exchange rates between India and the US. Assume that the equilibrium exchange rate in India is 76 Indian rupees per US dollar. Now suppose that the inflation rate falls in India. Which of the following choices shows a change we would expect to see in the Indian forex market? The demand for the US dollar would rise, leading to a depreciation of the Indian rupee. The demand for the Indian rupee would increase leading to an appreciation of the US dollar. The supply of the Indian rupee would rise leading to an appreciation of the Indian rupee. The supply of the US dollar would rise leading to an appreciation of the Indian rupee
- Assume that there's an increse in US consumers' preference for Japanese automobile. Which of the following chanfes will most likedly take place in the market for dollars a) It will take more yen to purchase the same amount of dollars b) the demand for dollars will increase c) the supply for dollars will increase d) the supply and demand of dollars will decrease e) there will be no change in the foreign exchange marketWill Net exports (equals exports minus imports) rise or fall under each of these scenarios: S. price level rises faster than foreign price levels S. GDP grows slower than foreign GDP $US falls in value relative to other currenciesThe effect that a change in the price level has on a country's exports and imports is called the: Exchange rate effect. Interest rate effect. International effect. Multiplier effect.
