MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Question
Chapter 20, Problem 7DQ
To determine
To Explain:The reason for Japan to consider the fall in international value of dollar alarming.
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Would each of the following groups be happy or unhappy if the U.S. dollar appreciated?
Australian tourists planning a trip to the U.S.
An American firm trying to purchase property overseas.
The American company Boeing sells an airplane to a Japanese airline. As a result, the US current account decreases and the US dollar appreciates.
True or False.
The US economy is growing faster than that of Japan. The faster growth rate in the US should cause the value of the dollar to depreciate against the yen, everything else being equal. Explain.
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- Japan has run large current account surpluses for much of the past two decades, yet no one ever asks if these surpluses are sustainable. Why are surpluses treated differently than deficits?arrow_forwardChinese firms wishing to purchase American goods and services are ___ in the foreign exchange market.arrow_forwardIf you were a Chinese exporter, what might you have done if you had anticipated the appreciation in the value of the yuan against the dollar that occurred in 2017?arrow_forward
- One of these four answers represents a group which doesn't gain from a weaker U.S. dollar. Which one? U.S exporting firms foreign investors who desire to increase their U.S financial asset holdings foreign tourists in the United States U.S. tourists abroadarrow_forwardCompanies that reduce their margins on export products in the face of appreciation of their home currency may be motivated by a desire toarrow_forwardThe gold standard caused the fluctuations of exchange rates between countries True or falsearrow_forward
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