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- Answer the given question with a proper explanation and step-by-step solution. Suppose that εD = 0.70 and ε_D^F = 0.50 for a given country: Suppose that the foreign currency price of this country’s exports falls by 18% following a devaluation. What will happen to the quantity of exports?A high value of a currency would result in which of the following?Select one:a. Greater competitiveness of exportsb. More exportsc. Increased demand of the higher value currencyd. Increased demand of exports of higher currency value products e. More ImportsIfWho receives the greatest benefit from a trade deficit? O Foreign consumers O Domestic farmers exporting agricultural products O Domestic firms in industries with significant imports O Domestic individuals who own stock Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
- Under which of the following would devaluation be unseuccesful? Select one: a) Domestic prices remain stable b) Inflation occurs c) Other countries do not retaliate d) The demand for imports is elastic e) Domestic prices fallIn March 2023, imports for the US exceeded their exports by $60.6 billion. In June 2023, the importsexceeded the exports by $74.6 billion. If this trend continues, what impact can this have on the US in the longterm?A. Increased foreign investmentB. Stronger domestic currencyC. Decreased trade protectionismD. Accumulation of foreign debtThe nation of Elbonia has long banned the exportof its highly prized puka shells. A newly electedpresident, however, removes the export ban. Thischange in policy causes the nation’s currency to_________, making the goods Elbonia imports_________ expensive.a. depreciate; lessb. depreciate; morec. appreciate; lessd. appreciate; more
- Which of the following would cause exports to rise? A) A depreciation of the exchange rate B) A fall in overseas income C) An appreciation of the exchange rate D) None of the aboveConsider a small open economy. Assume that GDP (Y) is 5000. Consumption (C) is given by the equation C = 1000 + 0.25(Y-T). Investment (I) is given by the equation I = 1500 – 50r, where r is the real interest rate in percentage points. The world interest rate is actually 5% (r*=5). Taxes (T) are 1000 and government spending (G) is 1500. Net exports are given by the equation NX=500-250Ɛ. Suppose T and G at their initial values (1000 and 1500). Suppose there is a shift in the global supply of funds, so that the new world interest rate becomes 3%. Compute the equilibrium real exchange rate. Represent the equilibrium graphically and interpret your result.If the demand for a country's exports falls at the same time that tariffs on imports are raised, will the country's currency tend to appreciate or depreciate in the long run?
- A country's annual imports are I(t) = 30e0.2t and its exports are E(t) = 20e0.1t, both in billions of dollars, where t is measured in years and t = 0 corresponds to the beginning of 2000. Find the country's accumulated trade deficit (imports minus exports) for the 10 years beginning with 2000. (Round your answer to the nearest billion dollars.)State whether each of the following events involves a financial flow to the Mexican economy or a financial flow out of the Mexican economy: a. Mexico imports services from Japan b. Mexico exports goods to Canada c. U.S. investors receive a return from past financial investments in MexicoUnder fixed exchange rate system and small open economy, expansionary fiscal policy is effective while restricted trade policy is ineffectiveGraphically explain THE point of view by using Mundell-Fleming model.