If the U.S. interest rate rises, the exchange rate value of the dollar ________ and net exports ________. a. rises; increase b. rises; decrease c. falls; increase d. falls; decrease
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Net exports, the difference between exports and imports depend on exchange rate. Appreciation reduces net exports and depreciation increases net exports.
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- Is a country for which imports and exports comprise a large fraction of the GDP more likely to adopt a flexible exchange rate or a fixed (hard peg) exchange rate?If there is a decrease in the desire of foreigners to purchase goods and services from the United States and a lower desire to invest in U.S. banks and businesses, then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would depreciate. B. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the U.S. dollar would depreciate. D. The equilibrium quantity of foreign currency would increase and the U.S. dollar would appreciate.In the foreign exchange market, when the U.S. interest rate rises, the supply of dollars ________ and the foreign exchange rate ________. A. decreases; rises B. increases; falls C. increases; rises D. increases; does not change E. decreases; falls
- Would each of the following transactions be includedin U.S. net exports or in U.S. net capital outflow?Indicate whether it would represent an increase or adecrease in that variable.a. An American buys a Sony TV.b. An American buys a share of Sony stock.c. The Sony pension fund buys a bond from theU.S. Treasury.d. A worker at a Sony plant in Japan buys someGeorgia peaches from an American farmer.The supply of U.S. dollars on foreign exchange markets is a. derived from the supply of U.S. goods. b. derived from the demand by United States for imported goods and services. c. determined directly by open market operations at the Federal Reserve Bank. d. derived from the demand for U.S. products by foreigners.The supply of U.S. dollars on foreign exchange markets is A. derived from the supply of U.S. goods. B. determined directly by open market operations at the Federal Reserve Bank. C. derived from the demand for U.S. products by foreigners. D. derived from the demand by United States for imported goods and services.
- The graph shows the supply curve of Canadian dollars. Draw a new supply curve that shows the effect of a rise in the expected future exchange rate. Label it. A change in the expected future exchange rate changes the supply of Canadian dollars________, and a change in Canadian demand for imports changes the supply of Canadian dollars O A. today; today B. in the future; today C. today; in the future D. in the future; in the future 120 MacBook Pro 110 100- 90- 80- 70- Exchange rate (Canadian cents per Canadian dollar) Click the graph, choose a tool in the palette and follow the instructions to create your graph. So 70 80 90 100 10 20 30 40 50 60 Quantity (billions of Canadian dollars per day) >>> Draw only the objects specified in the question.If there is a decrease in the desire of Americans to purchase goods and services from other countries and put money in foreign banks and businesses then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would increase and the US dollar would appreciate. B. The equilibrium quantity of foreign currency would decrease and the US dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the US dollar would depreciate.In some cases, governments will intervene in the currency markets to incresae or decrease the value of the country's currency. Which of the following is an example of direct intervention in foreign exchange markets? A. The European Central Bank lowers interest rates to increase the value of the euro. B. The Japanese government purchasing JPY with USD to increase the value of the Japanese yen. C. China imposing barriers on imports from Europe. D. The U.S. lowers interest rates to decrease the value of the U.S. dollar.
- Suppose the French suddenly develop a strong taste for California wines. Answer the following questions in words and with a diagram. a. What happens to the demand for dollars in the market for foreign-currency exchange? b. What happens to the value of the dollar in the market for foreign-currency exchange? What happens to U.S. net exports? с.What types of money flow out of the US? The direction of net capital flows is determined by what? What is an exchange rate between dollars and Euros? What does it mean when a country’s currency depreciates in the foreign exchange markets? Who wins and who loses in an economy when its currency devaluates in the foreign exchange market? need answer . absuletlyupvote !Someone please answer this questionIf international speculators lose confidence in foreign economies and want to move some of their wealth into the U.S. economy, then in the short run there is A. a decrease in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a higher U.S. price level. B. an increase in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a lower U.S. price level. C. an increase in the value of the U.S. dollar in foreign exchange markets, a higher level of U.S. output and a higher U.S. price level. D. a decrease in the value of the U.S. dollar in foreign exchange markets, a lower level of U.S. output and a lower U.S. price level.
