ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
4th Edition
ISBN: 9781285423548
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 4.7PA
To determine
The managed float system and its benefits over the freely floating exchange rate system.
Concept Introduction:
The method by which the currency of a country is regulated by its authority in accordance with other countries currencies and foreign exchange markets is known as Exchange rate regime. Many standards of exchange rates have prevailed thus far in the world economy such as gold standard, Bretton-Wood standard and currently the managed float standard.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
40.
Thailand is a net-importer. This means that they import more than they export. How does this affect the value of their currency with respect to foreign exchange?
a.their currency will not be affected
b.their currency will become strong
c.their currency will become weak
d.None of these
16.
If the dollar depreciates relative to the Swiss franc
Question 16 options:
a)
Swiss chocolate will become more expensive in the United States.
b)
Swiss chocolate will become cheaper in the United States.
c)
American computers will become more expensive in Switzerland.
d)
Swiss computers will become cheaper in the United States.
Exports of goods and services
1,872
Imports of goods and services
2,375
Net unilateral transfers
-99
Net Investment Income
170
Capital Account
-7
Net US acquisition of financial assets
958
Net US incurrence of liabilities
1,391
Net financial derivatives
-14
Based on the table above, the balance on the financial account is
Group of answer choices
454
447
-14
-447
Chapter 20 Solutions
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Knowledge Booster
Similar questions
- Why would a nation dollarize—that is, adopt another countrys currency instead of having its own?arrow_forwardWhat is the foreign exchange market?arrow_forwardA government official announces a new policy. The country wishes to eliminate its trade deficit, but will strongly encourage financial investment from foreign firms. Explain why such a statement is contradictory.arrow_forward
- Suppose a country has an overall balance of trade so that exports of goods and services equal imports of goods and services. Does that imply that the country has balanced trade with each of its trading partners?arrow_forwardQUESTION 19When the Australian dollar appreciates, we know that, other things equal: the dollar is less expensive to foreigners. foreign goods are less expensive to Australians. foreign currency is more expensive to Australians. Australian goods are less expensive to foreigners. none of the abovearrow_forward12. Imagine that you are the manager of a company considering direct foreign investment. What country would you choose? Discuss the risks and benefits, government incentives, and political factors you considered in your decision. Please do not use anything that's already posted. Thanks.arrow_forward
- 20- Balance of payments (BOP) is measuring all international economic transactions between the residents of a country and foreign residents. Please expand the statement by discussing what economic activities are measured by BOP? And why it always be balanced?arrow_forward21. What does Foreign Exchange mean? Why do we see currency fluctuations?arrow_forwardDefine purchasing power parity. What is the importance of purchasing power parity when you are trying to establish value for a company located in an emerging market?arrow_forward
- 7) On may 1,2015 the yen/dollar and euro/dollar exchange rates were ¥120.15 and €0.8929, respectively. What is the euro/yen cross exchange rate?arrow_forwardWhen analyzing the exchange rates above, how would you determine if the value of the US dollar has appreciated or depreciated? Use examples from the tables. of Currency Exchange Rate JANUARY $1 = Exchange Rate MARCH $1 = Polish Zloty4.54.08Mozambique Meticals62.566.00Albanian Lek109.08111.60Australian Dollar1.851.67arrow_forwardYear 2014 2015 2016 US $ 1$ 1$ 1$ Canada $ $1.25 $1.35 $1.45 Based on the Exchange rates above, Which of the following is true? A)Fewer Canadian $ are needed to buy a US$ B)The Canadian $1 is more expensive and is appreciating C)The $1 is more expensive and is appreciating D)The dollar has lost valuearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax