The current exchange rate between Canadian dollar and British Pound is 1 Pound = 1.55 C$. If the C$ weakens by 1.25% relative to the British pound, how much will be C$ per British Pound? ____________.What is the percentage that British pound appreciates? ______________%. (Please pay attention to this %, if your answer is like 22.45%, you should input 22.45)
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The current exchange rate between Canadian dollar and British Pound is 1 Pound = 1.55 C$. If the C$ weakens by 1.25% relative to the British pound, how much will be C$ per British Pound? ____________.What is the percentage that British pound appreciates? ______________%. (Please pay attention to this %, if your answer is like 22.45%, you should input 22.45)
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- Imagine that the U.S. economy finds itself in the following situation: a government budget deficit of 100 billion, total domestic savings of 1,500 billion, and total domestic physical capital investment of 1,600 billion. According to the national saving and Investment Identity, what will be the current account balance? What will be the current account balance if Investment rises by 50 billion, while the budget deficit and national savings remain the same?Suppose U.S. interest rates decline compared to the rest of the world. What would be the likely impact on the demand for dollars, supply of dollars, and exchange rate for dollars compared to, say, euros?Q2: The current exchange rate between Canadian dollar and British Pound is 1 Pound = 1.55 C$. If the C$ weakens by 1.25% relative to the British pound, how much will be C$ per British Pound? ___________.What is the percentage that British pound appreciates? ______________%. (Please pay attention to this %, if your answer is like 22.45%, you should input 22.45)
- True or False? “U.S. exports create a demand for foreign currencies; foreign imports of U.S. goods create a supply of foreign currencies.” Explain. Would a decline in U.S. consumer income or a weakening of U.S. preferences for foreign products cause the dollar to depreciate or to appreciate? Other things equal, what would be the effects of that depreciation or appreciation on U.S. exports and imports?1) Assume Turkish lira (TL) is expected to depreciate by 10% over the next year against US dollar. If the Turkish interest rate is15%, what would be the US interest rate that can make a Turkish investor to be willing to buy US securities today? Assume capital is perfectly mobile between Turkey and US. 2-) If the price level of Turkish goods is 200, the price level of foreign goods is 125, and the lira price of foreign currency is 1.20, what is the real exchange rate? What is the meaning of this rate for the competitiveness of Turkish goods? 3-)With the help of an IS-LM diagram show and explain the effect of restrictive monetary policy on output under flexible exchange rates and perfect capital mobilityTrue/False and Explain An increase in savings implies a decrease in consumption and therefore a decrease in GDP. The exchange rate between two countries can be thought of as unrelated to any economic variables. If the real rate of return on investment is higher in the US than in Canada, capital will tend to flow out of the US and into Canada. When nominal interest rates are zero, the central bank can still lower them by printing money and purchasing bonds from banks. This increases the supply of loanable funds and stimulates lending. A pro-savings policy by the US would likely reduce the US trade deficit. When savings equals investment, reducing savings and increasing consumption is especially effective in stimulating output. In the dynamic AS-AD model, a perfectly inelastic aggregate supply curve means the central bank cannot control the rate of output growth or the inflation rate. 8. There are an infinite number of combinations of real interest rates and inflation rates…
- Suppose the interest rate in Japan is 9%, and inflation is expected to be 4%. Meanwhile, the expected inflation in Singapore is 11%, and the Australian interest rate is 14%. To the nearest whole number, what is the best estimate of the one - year forward exchange premium (discount) at which the Australian dollar would be trading at relative to the Singapore dollar? INSTRUCTIONS: 1. Be precise in the formulas you use. 2. Please input your final answer without percentage signs (%).Suppose that Nevada Co., a US MNC, sold consulting services to Primedia, a company based in Belarus, for 750 rubles. At the time of the transaction, the prevailing exchange rate was $0.45. If Nevada Co's bank does not desire to hold such a large amount of rubles, which of the following exchange rates might they be willing to accept when Nevada Co. seeks to exchange the rubles for dollars? A. $0.54 B. $0.43 C. $0.47 D. $0.509) Which of the following can lead to an increase in the demand for Japanese yen compared to the U.S. dollar? a) an increase in the relative price of Japanese-made goods b) an increase in the interest rate in Japan relative to the U.S. rate c) a decrease in the amount of yen bought by the U.S. government d) a decrease in the demand for goods made in Japan 10) Which of the following statements is NOT true? a) If a country's exports exceed its imports, then there is a trade surplus. b) If the balance of trade is positive, then the balance of payments is also positive. c) If a country's balance of trade is positive, then its exports exceed its imports. d) A country's balance of trade includes trade in both goods and services.
- 13. Assuming that all international parity conditions, i.e., CIRP, UIRP, PPP, and Fisher Effect, are being held true, what would become of the real exchange rate and real interest rates? Explain.Give typing answer with explanation and conclusion Suppose that the current exchange rate is 1.48 euro = 1 pound, but it is expected to be 1.35 euro =1 pound in one year. If the current interest rate on a one-year government bond in the United Kingdom is 9 %, what does the interest-rate parity condition indicate the interest rate will be on a one-year government bond in Germany? Assume that there are no differences in risk, liquidity, taxation, or information costs between the bonds. The German interest rate will be ________ %. (Round your response to two decimal places.)1. Which of the following correctly explains the potential disadvantage of a freely floating exchange rate regime? A freely floating exchange rate may compound a country’s inflationary problem. It is because if a country experiences high levels of inflation, its currency may weaken. A weaker currency can cause import prices to rise, which can increase the prices of materials and supplies and subsequently the price of the finished goods, compounding the country’s inflationary problem. A freely floating exchange rate regime may adversely affect a country that has high unemployment. It is because if the unemployment rate is high, the demand for import will decrease, putting appreciation pressure on the home currency. A stronger home currency will cause domestic consumers to purchase foreign, rather than domestic products, because the foreign products are now cheaper. This reaction of domestic consumers can be detrimental to a country during periods of high unemployment. All the…