For each of the following participants of the foreign exchange market, state (i) whether they are a demander or supplier of PKR (ii) whether a stronger/appreciating PKR will harm or hurt them. A Pak exporter to China A Pak importer from France A Malaysian tourist visiting Pakistan. A Pakistani bank investing in Japanese government bonds
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- A rise in the real exchange rate is called (a) a real depreciation. (b) a real bargain. (c) a real devaluation. (d) a real appreciation.Question 5 (a) Can you identify any implications of purchasing power parity? (b) Examine the exchange rate in your country compared to the Caribbean region. Do you see any large differentials or variations in the exchange rates? (c) Do you think LOOP really works? Give a reason for your answer? (d) If a can of spam costs $2 in the US and 6 pesos in Mexico, what would be the peso/dollar exchange rate if PPP holds? 5. If inflation is 3.5% in US and 7% in Mexico. What will happen to the peso/dollar exchange rate?Give an examples and non-examaples of foreign direct investment
- Which of the following will dcrease the supply of US dollars in the foreign exchange market? (A) US consumer demand fewer imports (B) Foreigners increase their demand for US goods ©) US residents increase their travel abroad Foreign Investors see increased investment opportunities in the USassume the following scenario between maxico and the US . nominal exchange rate= 25 pesos per $ , price of Hat =$100 in the US. price of Hat in maxico 1000 pesos . if the purchasing power parity holds and the price in maxico and the US are not changing but nominal exchange rate is flexible.what will be the nominal exchange rate? (a) 10 (b) 8 (c) 1 (d) 12A US based exporter sells US made goods in UK. The revenue last year was £1,000. The cost of goods was $800. The spot exchange rate was $1.25 per £. What was the profit in dollars? $400 $300 $250. Pls sir very fast
- How is the performance of Philippine economy in the year 2020 in terms of peso currency exchange rate to US dollars?What is the impact of each of the following changes (other variables remaining unchanged) on the real exchange rate. (a) The Consumer Price Index (which measures the price level) in the United States rises by 4 percent. (b) The Consumer Price Index in Jamaica rises by 9 percent. (c) The two Consumer Price Index changes above occur at the same time. (d) The nominal exchange rate moves from 86 to 90 for a U.S. dollar. (e) The nominal exchange rate depreciates by 10 percent at the same time that local inflation is 10 percent and the U.S. price level is stable.Does Foreign direct investment benefit all stakeholders. Discuss
- (A) Government spending rises to 1,250. Compute the investment, trade balance, national savings and the equilibrium exchange rate and illustrate graphically. (B) Suppose that the world interest rate rises from 5 to 10 percent (G is again 1,000). Solve for national saving, investmentm trade balance and the equilibrium exchange rate. Explain what you find compared to part (A) and explain graphically.Description What accounts for differences in living standards between rich and poor countries today. Explain. Describe some differences in purchasing power parity of rich nations and poor countries today. Use actual examples of the purchasing power in comparison countries (rich and poor) to describe. Be specific.Q.1.11 What is a foreign exchange rate? (a) The rate at which the currency of one country trades for the goods ofanother country.(b) The rate at which one country’s goods trade for those of anothercountry.(c) The rate at which currencies of different countries are exchanged.(d) The rate at which one country’s currency trades for gold provided byanother country.Q.1.12 As a result of more Americans visiting South Africa, we can expect, ceteris paribus:(a) an appreciation of the rand relative to the dollar.(b) a depreciation of the rand relative to the dollar.(c) an appreciation of the dollar relative to the rand.(d) that it will cost South Africans more to visit the United States.Q.1.13 What is a tariff? (a) A form of subsidy.(b) A tax on imported goods.(c) A tax on foreign property.(d) A form of quota.