The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that Japan puts quotas on all U.S. imports. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scena ? PRICE (Yen per dollar) S D QUANTITY OF DOLLARS (Millions per day) If Japan puts quotas on all U.S. imports, the U.S. dollar 604.
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- As a country develops economically, what changes usually take place in the goods it exports? Select your answer and explain WHY There is little change because comparative advantage does not change. Raw materials and agricultural products decline in importance, replaced by services and manufactured goods. Services and manufactured goods decline in importance, replaced by raw materials and agricultural products. Exports go from being diversified to being specialized in whatever the country finds its comparative advantage.When China's clothing industry expands, the increase in world supply lowers the world price of clothing. Consider the effects this has on both an importer and an exporter of clothing. Suppose the following graph represents the market for clothing in Germany prior to the expansion of China's clothing industry. Germany is an (IMPORTER OR EXPORTER) of clothing because the world price is (ABOVE OR BELOW) the domestic equilibrium price.In 2002, the United States placed higher tariffs on imports of steel. According to the open-economy macroeconomic model this policy reduced imports A. of steel into the United States and increased U.S. exports of other goods by an equal amount. B. into the United States and made the net supply of dollars in the foreign exchange market shift right. C. of steel into the United States, but reduced U.S. exports of other goods by an equal amount. D. into the United States and made U.S. net exports rise.
- The following graph shows the market for euros, which is initially in equilibrium. Suppose an economic expansion in the United States leads to an increase in the incomes of American households, causing imports from Europe to rise.Assume that you have been hired by an International Organization to be consulted on various issues that the country Motherland faces. For this exercise, assume that Motherland is a small agricultural economy. The biggest trading partner of Motherland is the United States. Unlike Motherland, the United States is a large industrial country. Assume Motherland imports electronics from the United States. The government of Motherland is considering to impose quotas on these electronics imports coming from the United States. Would you recommend it? Explain your answer. In your explanation, distinguish the effect on the consumers of electronics, the domestic producers of electronics and the government.Your explanation should not exceed 200 words.Suppose you are hired as a consultant by the government to determine the impact of trade policies. The government is suggesting a 10% nominal tariff on imported cars in order to limit competition against domestically assembled cars that incorporates only about 20 percent of domestic inputs in its total inputs. Discuss nominal tariffs and effective tariff rates. How much is the effective tariff rate? Why is the effective tariff rate different than the nominal tariff rate? Suppose the currency depreciation would lead to a higher price in the free market. However, the government wants to maintain the same amount of final price after tariffs. Determine the impact on the nominal tariff rate.
- Explain briefly but clearly if the following statement is true, false or uncertain: The common equilibrium relative price of the two goods after trade can not lie outside the range bonded by the autarky (before trade) price ratios in the two countries.Nigeria and Singapore both produce paper and pens. It takes Nigeria four labor hours to produce a box of paper and half hour to produce a pen. In Singapore, production of each takes three labor hours. Assume both countries have 12 labor hours for simplicity. _________has absolute advantage in the production of paper. ________ has comparative advantage in the production of paper. Hence, ______ should export pens. To benefit both countries, the price of a pen should be between __ and __ boxes of paper. Fill in the blanks.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?