Principles of Economics (Second Edition)
2nd Edition
ISBN: 9780393614077
Author: coppock, Lee; Mateer, Dirk
Publisher: W. W. Norton & Company
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Chapter 33, Problem 4QFR
To determine
To explain:
The side of capital account in which assets and liabilities are mentioned.
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Students have asked these similar questions
Assume in a given month, Japan's export to the U.S. increased. How such an increase will affect the
Japanese Yen? From a U.S. perspective, how this increase will affect the U.S. dollar? Knowing that
both currencies can float, verbally explain your answers using the demand/supply model (no need
to draw a graph).
Which best explains why U.S. businesses want the U.S. dollar to decrease in value against the Chinese renminbi?
They want to be able to buy more raw materials from China.
They want to sell more products to Chinese consumers.
They want to buy more goods from Chinese businesses for resale.
They want to be able to move their factories to China.
In the foreign exchange market, the supply curve for the dollar is upward sloping. That is, when the exchange rate (foreign
currency per dollar) increases, the quantity of dollars supplied increases.
Assuming actors have not yet had time to change their expectations about the future exchange rate, when the exchange rate
increases, why is the supply curve of dollars in the foreign exchange market upward sloping?
Foreign goods and services are less expensive to import.
U.S. firms profit more by selling their goods and services domestically rather than selling to foreigners.
The expected profitability of purchasing a dollar today to sell in the future rises.
U.S. goods are less expensive for foreigners to purchase.
Chapter 33 Solutions
Principles of Economics (Second Edition)
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