Suppose the government of Country A imposes a tariff on the goods and services imported from Country B. Draw two graphs to illustrate the changes in the values of Country A’s currency and Country B’s currency.
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- In our pretend world there are two countries - Chile and Switzerland - that are engaged in trade. The firm Switzerland Chocolates Express sells Boxes of chocolate (a good) in Chile. Each Box of Chocolates sells for 6500 Chilean pesos in Chile. In Switzerland, each box of chocolates 11 Swiss Franc to produce. Assume that the firm has 1 million boxes of chocolate to sell. How much money (in Swiss Franc) would the firm make (or lose) on the sale at the following exchange rates: Rate 1: 550 Pesos per Swiss Franc Rate 2: 0.0015 Swiss Franc Per Chilean PesoYou work for a Nova Scotia Company trying to successfully enter the cranberry market in Australia. Analyze the entry country (Australia) based on the following; What are the major exports, dollar value, and trends? What are the major imports, dollar value, and trends? Does the entry country have a surplus or deficit for trade? What are the exchange rates? Are there any restrictions on currency trade? You should also consider sweat shops, skilled labor, employee unrest, political and social activists and labor unions in your analysis.Display graphically changes in the value of domestic currency, if a foreign government imposes tariffs on some kind of domestic goodsv
- Tradavia exports its world-famous giant sausages to Gourmland. If the price of a sausage is 8 Tradavian dollars in the home currency and there are 6 Gourmlandian pounds to 1 dollar, what is the price of a sausage in Gourmland?Suppose for a given country the demand for imports and exports can be expressed as shown below. Calculate the trade balance if E = 200 where E is the exchange ratio. Be sure to include the sign if you come up with a negative number. IM = 1,200 + 0.05E EX = 700 - 0.08EThe small happy Kingdom of Pollyanna does not trade with the rest of the world, but uses U.S dollars for its currency. Its domestic price of tofu is $1 per pound and the Kingdom produces and consumes 5 tons of tofu. The world price of tofu is just $0.50 per pound. At this price, the Kingdom would produce only 2 tons of tofu and would consume 8 tons of tofu, and thus have to import 6 tons of tofu. How much consumer surplus would the Kingdom gain from opening up to trade? (Note: 1 ton = 2000 lbs.)
- The small happy Kingdom of Pollyanna does not trade with the rest of the world, but uses U.S dollars for its currency. Its domestic price of tofu is $1 per pound and the Kingdom produces and consumes 5 tons of tofu. The world price of tofu is just $0.50 per pound. At this price, the Kingdom would produce only 2 tons of tofu and would consume 8 tons of tofu, and thus have to import 6 tons of tofu. What is the deadweight loss in the tofu market associated with the Kingdom staying closed to trade? (Note: 1 ton = 2000 lbs.)What is an export parity price? Give an export parity price for a specified commodity. (starting with the f.o.b price)The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that Japan puts quotas on all U.S. imports. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scenario. PRICE (Yen per dollar) S D QUANTITY OF DOLLARS (Millions per day) If Japan puts quotas on all U.S. Imports, the U.S. dollar 6.4.
- Assume the United States has a trade surplus with Brazil and imposes new tariffs on Brazilian coffee, a major export to the United States Brazil responds by imposing its own tariff on U.S.-made agricultural machinery. The Brazilian purchase of U.S. agricultural machinery is a debit to which subaccount of the Brazilian balance of payments? What will happen to the quantity of agricultural machinery produced by Brazilian manufacturers?A Senator announces his past support for protectionism. “The U.S. trade deficit must be reduced, but import quotas only annoy our trading partners. If we subsidize U.S. exports instead, we can reduce the deficit by increasing our competitiveness.” Using a three-panel diagram from Chapter 19 in the Mankiw textbook, show the effects of an export subsidy on U.S. net exports, national saving, domestic investment, net capital outflows, the interest rate, and the real exchange rate. Do you agree with the senator?The U.S. price of corn is $100 per ton, and the exchange rate between the U.S. dollar and the Japanese yen is ¥120 = $1.00. Calculate the international price of U.S. corn for Japan. If the exchange rate changes to ¥145 = $1.00, calculate the new international corn price for Japan.
