Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 14, Problem 4CQQ
To determine
The impact of removing the export ban on exchange rate.
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Assume there has been an increase in the volume of exports from South Africa to the United States.1. Explain which currency appreciated and which currency depreciated.
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Chapter 14 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
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- A9 In which of the following scenarios are currency speculators likely to attack a country's currency? When a currency is manipulated such that it makes imports more attractive for domestic residents. When the currency is fairly valued. When the currency is undervalued. When the value of the currency is pegged below the market equilibrium rate. When a currency is manipulated such that it makes a country's exports more attractive.arrow_forward9) 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.arrow_forwardWhat will happen if the people expect that the value of a currency will increase? a. There will be no effect b. There will be new fiscal policies c. The supply of it will rise d. The demand for it will risearrow_forward
- 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)arrow_forwardWhat is one advantage of a currency that is depreciating (weakening)? 2 answers A)Exports will increase and create jobsB)Imports will increaseC)Trade Surplus (Exports are greater than Imports)D)Trade Surplus (Exports are less than Imports)arrow_forwardIn each case, indicate whether the example (a) affects the demand for or supply of British pounds on international markets; (b) shifts demand/supply to the right or the left; (c) causes the pound to appreciate or depreciate. (a) Due to Brexit, European firms sharply cut purchases of British goods. (b) Foreign banks increase purchases of shares in British corporations. (c ) With COVID-19 cases rising, British residents cancel foreign travel plans.arrow_forward
- Devaluation can help boost country’s exports, slash trade deficit by shrinking imports, encourages import substitution and brings competitiveness in its manufacturing processes. During last three years, Pakistan devalued its currency by almost 40%. Did Pakistan achieve aforesaid objectives of PKR devaluation; Explain briefly?arrow_forwardSuppose the exchange rate between the South African Rand (R) and the United States Dollar ($) changed from R10 per $1 to R15 per $1. If domestic prices remain the same, what would be the effect of this situation on the Rand and South Africa's imports? Select one: a. A depreciation of the Rand, making South African imports from the United States more expensive b. A depreciation of the Rand, making South African imports from the United States cheaper c. The Rand would buy three times more goods than before the change occurred d. Appreciation of the Rand, making South African imports from the United States cheaper..arrow_forward
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