Suppose there is a real depreciation of the domestic currency. This real depreciation will cause:an increase in net exports.an increase in imports.a reduction in output.a decrease in government spending.all of the above.
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Q: In an open economy with few capital restrictions and substantial import-export trade, a rise in…
A: A rise in interest rate will make domestic currency more attractive to investors. They will start…
Q: Future U.S. deficits could be decreased
A: Fiscal deficit means that government's expenditure is more than it's revenue. Future U.S. deficits…
Q: Which of the followings cause the public to expect a depreciation of domestic currency?(There are…
A: Currency depreciation is a decrease in the value of a currency against the foreign currencies in a…
Q: A rise in interest rates is expected to lead to an appreciation of the currency, and a drop in…
A: A higher interest rate in a country leads to increase in the value of that country's currency…
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A: The deficit is the situation when the expenditure is higher than the revenue of the country.
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Q: A country finds itself in the following situation: a government budget deficit of $1200; total…
A: In the question above, it is given : A government budget deficit of $1200 Total domestic savings of…
Q: 1. Deflation is considered to be a.Beneficial for company profit b.Beneficial for consumers…
A: We will answer the first question since the exact one was not specified. Please submit a new…
Q: Australia has a current account surplus of $1 billion per quarter and a net income deficit of $5…
A: Australia is an open economy due to which it makes rade transactions with the rest of the world, and…
Q: State true/False Difference between value of exports and imports of goods and services is called…
A: The balance of trade or net exports is the difference between the monetary value of a country's…
Q: Which of the following is related to the disadvantage of foreign direct investment (FDI) on…
A: FDI is long term investment or it is an investment that control the ownership of a firm. Usually the…
Q: the US trade deficit is made possible, in part, because of foreigners' demand for US financial…
A: The trade deficit reflects the fact that foreigners want to invest in America, so they sell us goods…
Q: a rise in interest rsates is expected to lead to an appreciation of the currency, and a drop in…
A: A currency appreciates when its value increases in terms of echange rate relative to other currency.…
Q: The U.S. trade deficits of the 1980s and 1990s may represent a problem because they will require…
A: Trade Deficit: The term trade deficit refers to the situation where the country's import is more…
Q: Canada is an open economy that interacts with the rest of the world through its involvement in world…
A: Answer: Given that: Suppose you are the purchasing manager for a large chain of restaurants in…
Q: Which of the following will NOT cause a depreciation of the rand against the dollar? choose the…
A: Imports are goods produced in a foreign country and bought by people of home country. When people…
Q: an increase of the international value of the US dollar will most likely benefit a) domestic…
A: International trade agreements govern the exchange of goods and services between two or more…
Q: Suppose a country has an overall balance of trade so that exports of goods and services equal…
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Q: item billions of No Coin dollars consumption expenditure 731 Export of good and services 267…
A: Given: Consumption expenditure 731Exports of goods and services 267Government expenditure 240Net…
Q: An increase in inflation in the United States relative to the rate in France would make: a.…
A: Inflation means a rise in the overall price level in the economy.
Q: Investment equals $2,120 million in your country. Private saving is $2,750 million and the…
A: Trade balance: - trade balance is the difference between a country’s exports and imports in terms of…
Q: A country that allows demand and supply to determine the value of its currency is said to have a…
A: Exchange rate determines the price of the currency of a domestic country when it is exchanged with…
Q: True/False The exchange rate between two countries can be thought of as unrelated to any economic…
A: Exchange rate is the price of one currency being measured in terms of another currency.
Q: Suppose that the government deficit is 20, interest on the government debt is 15, taxes are 55,…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Which of the following are direct foreign investments? Explain your answer. i. A Chinese…
A: Foreign direct investment FDI is a purchase of an asset (partially or completely) by an entity which…
Q: A current account deficit is generally a result of: a large amount of U.S. purchases of…
A: Current account deficit:The current account deficit refers the measures of a country's trade where…
Q: Turkey has run a trade deficit for almost every year during the past few decades. Which of the…
A: The current account deficit began to pose a threat to Turkey's economy in the early 2000s, and it…
Q: Companies that reduce their margins on export products in the face of appreciation of their home…
A: As a result of appreciation exports are going to decline. If they reduce their profit margin , they…
Q: Which of the following would cause the supply of U.S. dollars in the forex market to decrease?…
A: The higher interest rate will attract foreign investments in a domestic country. If the interest…
Q: Purchasing power parity does not hold in the short to medium run because (a) exports don’t equal…
A: International trade allows nations to interact with one another in the form of export and import of…
Q: A currency is said to appreciate in real terms if, other things remaining unchanged, a) domestic…
A: The price of domestic currency in terms of foreign currency is called the exchange rate. For…
Q: Which of the following statements does not belong to the main benefits of foreign direct investment…
A: Foreign Direct Investment (FDI) is one of the activities performed by an open economy economy that…
Q: QUESTION 3Which of the following will cause a real depreciation? a reduction in the exchange rate of…
A: Real depreciation: It refers to the decrease in the exchange rate in the economy. When the…
Q: which of the following cause the public to expect a depreciation of domestic currency? (there are…
A: When import demand rises, demand for foreign currency rises, which appreciates foreign currency and…
Q: Display graphically changes in the current value of domestic currency, if the domestic currency…
A: We are going to use theories related to Exchange Rates and Open-Economy to answer this question.
Q: real depreciation in the value of a nation's currency should result in
A: Option (a). Depreciation of domestic currency makes exportable goods cheaper and foreign goods…
Q: The US Financial Account will fall: when US net exports fall when a Chinese bank uses US dollars to…
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Suppose there is a real
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- A rise in interest rates is expected to lead to an appreciation of the currency, and a drop in interest rates is expected to lead to a depreciation. True FalseAs the domestic price level falls domestic citizens will import less and direct spending to relatively cheaper domestic goods. Foreigners may also purchase more exports. Overall this will improve the trade balance and increasing aggregate demand. This phenomenon is known as the wealth effect the exchange rate effect the interest rate effect the liquidity effectIncrease in foreign income will _______ net export but depreciation of domestic currency will ________ net export. Increase: Decrease Increase: Increase Decrease: Increase Decrease: Decrease
- Pomegranate has shown to be a cancer-fighting superfood Because the value of the US dollar is declining relative to other currencies, American exports have increased. Global oil prices tank as shale fracking surges. Housing market crashes, new construction starts at a ten-year low. House votes to block EPA regulations on coal-fired electricity plants.When exports and imports are exactly equal for a country, this is called... Net imports. Trade surplus. ⒸNet exports. Trade deficit. Balanced trade.Which of the following are direct foreign investments? Explain your answer. i. A Chinese company pays $6.49 million for a stake in the Hilton. ii. A Russian businessman buys $44 billion on FOREX. iii. An American company buys another American company; stockholders in the bought-US company sell their shares on FOREX. iv. A Turkish company builds a factory in Ethiopia and manages the factory as a contractor to the Turkish government.
- The macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariff will reduce South Africa's trade deficit.If a country has a trade deficit of $30 billion, which of the following can be true? Group of answer choices The country's exports are $150 billion and its imports are $120 billion. The country's exports are $110 billion and its imports are $140 billion. The country's exports are $140 billion and its imports are $40 billion. The country's exports are $120 billion and its imports are $140 billion.Turkey has run a trade deficit for almost every year during the past few decades. Which of the following is the main factor leading to this situation? a.The Turkish lira is overvalued against foreign currencies. b.International demand for Turkish goods and services is low. c.Domestic demand for foreign goods and services is high. d.National saving in Turkey is low relative to domestic investment.
- “There has been a turnaround from the sizeable net outflows over the past two years when South African companies stepped up their efforts to internationalise their businesses. The shift in direct investment trends made a small contribution to improving the financial account of South Africa’s balance of payments, which showed a surplus of 3.5% for the third quarter, up from 1.3% the previous quarter. The Reserve Bank’s quarterly bulletin shows that capital inflows were more than adequate to finance the deficit on the current account deficit of the balance of payments, which widened to 4.1% from a revised 2.9% in the third quarter. Economists expect that the current account deficit, which tends to be a driver of the rand exchange rate, will narrow again in the fourth quarter as exports pick up again” (Joffe, 2016). In your opinion, can the government keep export demand stimulated such that the balance of payments remains dazzlingan increase of the international value of the US dollar will most likely benefit a) domestic producers of premium wines sold to people in other countries b) currency traders holding large quantities of yen c) German citizens vacationing in the US d) Canadian citizens expecting to purchase real estate in the US e) retired US citizens living overseas on their Social Security checksFuture U.S. deficits could be decreased by options: increasing transfer payments and decreasing interest payments on the debt increasing government expenditures and decreasing taxes decreasing current and future taxes decreasing government expenditures and increasing taxes
