true or false & why Russia demands payment in the rouble, which is Russia’s currency, for Russian gas instead of US dollars. Given that Russian gas is an essential item, US dollars per rouble will increase.
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true or false & why Russia demands payment in the rouble, which is Russia’s currency, for Russian gas instead of US dollars. Given that Russian gas is an essential item, US dollars per rouble will increase.
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- If a dollar can buy 98 Japanese yen and a British pound costs $1.50, how many yen would it take to buy £1? If a pound of copper costs £1 in Britain, ¥1,600 per pound in Tokyo, and $1.45 per pound in the United States, where is a pound of copper most expensive and where is it least expensive?Do all international financial transactions necessarily involve exchanging one nation’s distinct currency for another? Explain. Could a nation that neither imports goods and services nor exports goods and services still engage in international financial transactions?Right now (Fall 2022), the US dollar is significantly stronger that it has been during the last few years — it appreciated against most currencies by about 15-20 percent over the period of two years. Looking at two groups of economic agents — US consumers and US producers — how does stronger currency affect any of these two groups? (other things being equal)
- What do we mean by a weak or strong dollar and what part does it play in the operation of North Pole Toys?Suppose that you hold a piece of land in the city of London that you may want to sell in one year. As a U.S. resident, you are concerned with the dollar value of the land. Assume that if the British economy booms in the future, the land will be worth £2,000, and one British pound will be worth $3.20. If the British economy slows down, on the other hand, the land will be worth less, say, £1,500, but the pound will be stronger, say, $3.30 per pound. You feel that the British economy will experience a boom with a 60 percent probability and a slowdown with a 40 percent probability. Required: Estimate your exposure (b) to the exchange risk. Note: Negative amount should be indicated by a minus sign. Compute the variance of the dollar value of your property that is attributable to exchange rate uncertainty.When a country's currency appreciates, is this generally good news or bad news for a country's consumers? Is it generally good or bad news for the country's businesses? Explain your reasoning - try to use examples.
- You are going to Japan on an exchange trip in a few months and need to turn your dollars into the Japanese currency, the yen. Right now the exchange rate is $1 = 105 yen, but you expect the dollar to appreciate next month and it should be valued at $1= 107 yen. If you exchange $200 for yen today, how many yen will you receive? Explain. If you decide to wait and exchange your dollars when they are worth $1= 107 yen, how many yen will you receive? Explain. Based on this information, should you exchange your money now or wait a few months? Explain.Suppose the 12-month forward price of the yen in terms of dollars is .02 dollars per yen. Suppose the spot price of of the yen in terms of dollars is .019. Next, suppose that currently the annual interest rate on dollar deposits is 2%, while the interest rate on a comparable yen deposit is 1%. There are no transactions costs. Is there an arbitrage opportunity here? If so, explain exactly how you would take advantage of this situation to make riskless profits.Suppose that you hold a piece of land in the City of London that you may want to sell in one year. As a U.S. resident, you are concerned with the dollar value of the land. Assume that, if the British economy booms in the future, the land will be worth £20 and one British pound will be worth $1.27. If the British economy slows down, on the other hand, the land will be worth less, i.e., £23 million, but the pound will be stronger, i.e., $1.40/£. You feel that the British economy will experience a boom with a 70% probability and a slow-down with the remaining probability.Estimate the expected value of the spot rate (USD X.XXXX)
- Suppose that Germany (country a) and France (country b) do not have foreign currency controls in effect. The total demand for money is always 2,000 goods in Germany and 1,000 goods in France. The fiat money supplies are 100 marks in Germany and 300 francs in France. A. Find the value of each country's money if the exchange rate et is 3. Do the same if et =1. Is one exchange rate more likely than the other? Explain. B. Suppose the exchange rate is 3 and France triples its fiat money stock, whereas Germany prints no new money. How many goods will France gain in seigniorge? What fraction of this seigniorge comes from German citizens?Suppose that sanctions imposed on Russia limit the country's ability to sell oil and engage in other international transactions. What is the expected impact on the value of the Russian ruble? A. The sanctions will not have any impact on the value of the ruble. B. The value of the ruble is expected to increase. C. The value of the ruble is expected to decrease.Ignoring any change in exchange rates, if interest rates in country X are 3%, interest rates in country Y are 2.5%, and interest rates in country Z are 1%, what would be the most profit you could make by borrowing and depositing $10,000? Give typing answer with explanation and conclusion