Question- Discuss the role of Balance of Payments on the macroeconomic factors of the economy. Also discuss about the BOP in the context of the Oman and what we can predict about future after seeing this pattern on macroeconomic factors in the country.
Q: Explain with illustrations or diagram, the effect of short-term movements in the business cycle on…
A: A) In the short run, trade imbalances can be affected by whether an economy is in a downturn or on…
Q: QUESTION 8 As a result of entering the world economy, Neverland experiences economic boom and its…
A: *SOLUTION :- 8) The answer is = 77.5
Q: What are the automatic adjustment mechanisms for current account imbalances under the classical and…
A: The current account components would involve the exports and imports of goods and services and…
Q: Consider the COVID-19 pandemic and the ongoing financial developments for building your arguments…
A: Answer: Suppose to mitigate the adverse effects of COVID-19 pandemic on the economy the U.S.…
Q: Q1)Which of the following is NOT a macroeconomic indicators (as mentioned in the presentations) that…
A: Hi! thanks for the question but as per the guidelines, we can answer only one question at one time.…
Q: (a) it is expected that a new invention will become available in the future). Which are the effects…
A: A small open economy, shortened to SOE, is an economy that takes part in global exchange, however is…
Q: EXPLAIN IN DETAIL and GRAPHIC with the Mundell-Fleming model under flexible exchange rate and…
A: Mundell-Fleming Model is defined as a model which is used to argue that an economy cannot…
Q: Currency crises and the demand for dollars: Suppose there is a currency crisisin the rest of the…
A: Exchange rate is the price of a currency of one country in terms of the currency of another country.…
Q: PLEASE EXPLAIN WITH A DIAGRAM OR GRAPH ! THANK YOU A) Why the BP schedule is upward sloping?
A:
Q: QUESTION 9 As a result of entering the world economy, Neverland experiences economic boom and its…
A: An economy's current account maintains track of its foreign dealings with the rest of the world. All…
Q: With the help of diagram, explain if the policies to appropriate macroeconomic defend when the…
A:
Q: Consider a classical economy. Assume that the GDP of an economy is 9000. Consumption is given by the…
A: GDP = 9000 C = 600 + (3/4)YD -40r I = 1200 - 120r NX = 1500 - 200e Budget deficit = 500 Government…
Q: Explain the essence of IS-LM-BP model and equilibrium in the model! Explain what happens if goods…
A: The Mundell-Fleming model, also known as the IS-LM-BoP model, is an economic model developed by…
Q: Economics n the exchange rate model with short-run price stickiness, the nominal interest rate…
A: Exchange rate - The exchange tells us about the worth of the currency of one country in comparison…
Q: In 2020, the United States dollar exchange rate fell by 7.2% against a basket of major currencies.…
A: Exchange rate: At this rate, the currency of one country will be exchanged for another.
Q: sical and Ke
A: The exchange rate is a macroeconomic variable whose determinants depend upon the choice of the…
Q: 1.Which of the following statements is true? A)Adjusting for purchasing-power parity makes…
A: All of the statement is true. There is a larger impact from PPP adjustments when comparing rich to…
Q: Suppose that the position of a nation's long-run aggregate supply (LRAS) curve has not changed, but…
A: LRAS remaining constant,price level would decrease if aggregate demand decreases. Following factors…
Q: If the domestic currency depreciates, A) using a graph of aggregate demand and supply EXPLAIN how…
A: Due to depreciation,exports would increase,causing aggregate demand to increase. Inflation and…
Q: In the years leading up to the global financial crisis (say, around 2005-06), the large U.S.…
A: (Q)In the years leading up to the global financial crisis (say, around 2005-06), the large U.S.…
Q: True / False questions with EXPLAINATION. 1. In AD - AS model , if the government increases tax on…
A: 1) If the government increases the tax rates in the AD-AS model, the income after tax in peoples'…
Q: There are two countries in the world, Australia and Japan. Suppose that th Australia and the central…
A: We have to find given statement is true or false.
Q: The unwinding of the U.S. trade deficit: Suppose some shock occurs to theU.S. economy that makes…
A: Due to the sudden trade deficit, consumer will be left with less money in hand due to which there…
Q: Suppose that in April the government undertakes the type of policy that is necessary to bring the…
A: The two sorts of adjustment strategies the Fed utilizes are expansionary monetary policy and…
Q: Under fixed exchange rates, monetary policy should be used to attain external balance and fiscal…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you as per…
Q: (3) Monetary policy response under a fixed exchange rate regime. Note that the priority of the…
A: The central bank maintains a fixed exchange rate by active intervention in the foreign exchange…
Q: Show an effect of a sale of dollars and a purchase of foreign assets (unsterilized intervention).…
A: The term unsterilized foreign exchange intervention implies to how a country's monetary authorities…
Q: C) What are the Exchange Rate Market implications of the change. In other words, what opportunities…
A: The price of a country's currency in relation to another country's currency. When countries use gold…
Q: Which of the following best describes a microeconomic question? (A) What is the value of US dollar…
A: Answer: The right answer for the above mentioned statement is option B: Should a particular firm…
Q: As a result of entering the world economy, Neverland experiences economic boom and its GDP goes up…
A: The current account of an economy keeps track of the country's international transactions with the…
Q: Consider the aggregate demand function, D(EPF/PH, Y-T, I, G) = C(Y-T) +I+G+ CA(EPF/PH, Y-T). When…
A: Trade agreements are agreements between two or more countries to promote the free flow of…
Q: What would happen if Russian Central Bank increases interest rate by %17 to %19 to real exchange…
A: Inflation rate is lower than interest rate.
Q: 2. From the table, relate Fiscal balance and Current account balance. Analyze why both show negative…
A: When the current account balance (CAB) is negative it is known as the current account deficit (CAD).…
Q: a) What is the main cause of the differences in living standards today compared to those of a…
A: a. The standard of living in the United States has in turn improved greatly as being compared with a…
Q: What the BOP stands for? What is the significance of maintain BOP? Explain the component of balance…
A: BOP stands for "Balance of Payments" and it records the all the transaction that occurs between the…
Q: Explain how changes in exchange rates impact the economy through the aggregate demand- aggregate…
A: Exchange rates in the economy shift the AD/ AS Curves upward or downwards.
Q: The tenure of the previous government, from 2013 to 2018, witnessed a skyrocketing current account…
A: Hi Student, Thanks or posting the question. As per the guideline, we are providing answer for the…
Q: The dollar depreciates by 20 percent against the Euro. Powell shoulc O Increase the monetary base by…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: COURSE: MACROECONOMIC - MUNDELL-FLEMING MODEL Until mid-2005, the Central Bank of China established…
A: The Mundell–Fleming model, commonly known as the IS-LM-BoP model (or IS-LM-BP model), is an economic…
Step by step
Solved in 3 steps
- COURSE: MACROECONOMIC - MUNDELL-FLEMING MODEL Until mid-2005, the Central Bank of China established a fixed exchange rate between its currency (yuan) and the dollar. The fixed exchange rate regime was reintroduced during the Great Recession between July 2008 and June 2010.After that date, the Chinese central bank established fluctuation bands for the yuan allowing it to move within these bands. However, the US has accused China on several occasions of taking actions to devalue its currency against the dollar.EXPLAIN and GRAPH with an open economy model with a fixed exchange rate (MUNDELL-FLEMING MODEL) the different chain effects that are generated when a country devalues its currency. From your results DETERMINE why it would be convenient for China to devalue its currency with respect to the dollar and in what way USA is harmed. Hint: according with statement on first paragrah, explain what's happens if devaluation process is defined and by Mundell-Fleming Model explain differents…What are the automatic adjustment mechanism for current account imbalance under the classical and Keynesiab views? Discuss.Explain how changes in exchange rates impact the economy through the aggregate demand- aggregate supply (AD/AS) model. Explain how fluctuations in exchange rates can influence loans and banks.
- Currency crises and the demand for dollars: Suppose there is a currency crisisin the rest of the world, leading to an increase in demand for U.S. dollars (a“fight to safety”). Use the AS/AD framework to explain the efects of thisshock on the U.S. economy. Be sure to explain carefully how and why theshock enters the AS/AD model. (Hint: If the rest of the world would likemore dollars, what does it have to give in exchange for those dollars?Please explain the right and the wrong answers Q1)Which of the following is NOT a macroeconomic indicators (as mentioned in the presentations) that consumers use to help make the best consumer decisions? a)The Interest Rate Spread B)The imputed exchange rate C)Recent rates of inflation D)Business cycle information E)All of the options are macroeconomic indicators Q2)Based on the following information which of the following statements is true? Inflation Rate 1999-2000 3% 2000-2001 3.3% 2001-2002 4.2% a)The U.S. experienced a depression from 1999-2002 b)The U.S. experienced escalating inflation from 1999-2002 c)The U.S. experienced disinflation from 1999-2002 d)The U.S. experienced deflation from 1999-2002 e)The U.S. entered into a recession from 1999-2002Explain with illustrations or diagram, the effect of short-term movements in the business cycle on the trade balance? Describe the pattern of U.S economy with respect to its current account balance from the 1950s to the present.
- Economics n the exchange rate model with short-run price stickiness, the nominal interest rate decreases immediately if there is a permanent increase in money supply. However, the model of monetary approach to the exchange rate suggests that the interest rate rises when there is a permanent increase in the growth rate of money supply. Explain how the different assumptions in these two models lead to contrasting predictions about the response of interest rates to the money supply. Show the relevant long-run time paths of the interest rate, price level and nominal exchange rate inMexico and the United States are trade partners. Each country has a zero current account balance and is operating in long-run equilibrium. Assume that the inflation rate in the United States is slowing relative to Mexico's inflation rate. (a) How will the inflation rate change in the United States affect: (i) Mexico's demand for U.S. goods and services? (ii) net exports of Mexico? Explain. (b) Illustrate the impact of the change you identified in part (a) on a fully labeled AD–AS model for the economy of Mexico. Use arrows to indicate any changes in AD, real GDP, and price level. (c) Ceteris paribus, will the national income of the United States increase, decrease, or remain the same? (d) On side-by-side and fully labeled foreign exchange market graphs, illustrate the impact of the change in relative inflation on the supply of Mexican pesos and on demand for U.S. dollars. Use arrows to indicate the change in the equilibrium exchange rate for each currency.…European Central Bank will keep its aggressive monetary stimulus that is, expansionary monetary policy in place, where as US will not continue to do so. "With the help of an equation", explain the effect of this on the long run depreciation of the US dollar
- True / False questions with EXPLAINATION. 1. In AD - AS model , if the government increases tax on households ' income , the price and total output will both increase in short - run . 2. In Keynesian cross model , the crossing point of AE and 45° line implies equilibrium in goods market 3. If domestic currency is depreciated in value , the Central Bank should buy foreign currency in the fixed exchange rate system . 4. In AD - AS model , the improvement in technology will shift both ASSR and ASLR curves to the rightIf 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.Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model, for what is more likely to happen.