VALUE OF EURO (U.S. dollars per euro) 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 0 50 100 150 200 250 300 350 400 450 500 550 600 QUANTITY OF EUROS (Billions) At an exchange rate of 1.2 per euro, the quantity of euros supplied is of euros supplied is + ? billion euros, while at an exchange rate of 1.8 per euro, the quantity sloping. billion euros. This confirms that the supply schedule for euros is
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- Use the following table, which shows the supply and demand schedules for the euro, to answer the next question. Quantity of Euros Price Supplied 400 360 300 286 267 Multiple Choice $1.10 1.00 0.90 0.80 0.70 O If the U.S. government decides to fix or peg the price of the euro at $1.00, it would have to buy 360 euros. sell 160 euros. buy 100 euros. Quantity of Euros Demanded 100 sell 360 euros. 200 300 400 500How much of their local currency would someone from UK (local currency is Pound) need to buy an iPad that is being sold for #=$500 in the US?On June 1, 2016, the exchange rate for U.S. dollars and euros was approximately $1.00 = €0.90, as shown in the market for U.S. dollars below. Suppose the interest rate is expected to fall in the European Union (relative to the interest rate in the U.S.). How will this affect the value of the dollar relative to the euro? Exchange Rate (€/S) 0.9 Quantity of Dollars Traded. D₁ S₁
- Euro area Norway United Kingdom Poland China Local Price: (Foreign currency) 4.08 42.00 3.29 10.80 21.00 Actual Exchange Rate (Dollars per unit of foreign currency) 1.12 0.12 1.25 0.26 0.14 PPP Exchange Rate (U.S. Dollars per British pound) Source: "The Big Mac Index, Our Interactive Currency Comparison Tool, The Economist, last modified January 10, 2019, accessed September 27, 2019, https://www.economist.com/news/2019/07/10/the-big-mac-index. - Dollar Price (Dollars) Purchasing-power parity (PPP) theory states that exchange rates would need to equalize the prices of goods in any two countries. For the dollar price of a Big Mac to be the same in both countries, a U.S. citizen would need to be able to convert $5.74 into exactly GBP 3.29. To find the exchange rate at which hamburger purchasing power is the same in both countries, divide the price in the United States by price in the United Kingdom: $5.76 GBP 3.29 $1.74 per pound 4.11 2.81 2.94 4.57 5.04 Exporting Big Macs from the Euro…The Central American country of Belize is one of approximately 14 Caribbean community countries that pegs its currency to the U.S. dollar. The pegged rate is 2 Belize dollars equal 1 U.S. dollar (2 BZD = 1 USD or 1 BZD = 0.50 USD). This is illustrated in the figure below. Exchange Rate (USD BZD) 2.00 1.00 0.50 D Quantity of Belize dollars traded per day How will the actions of speculators affect this market? O The Belize dollar supply curve will shift to the right and the Belize dollar demand curve will shift to the left. O The Belize dollar supply curve and the Belize dollar demand curve will shift to the right. O The Belize dollar supply curve will shift to the left and the Belize dollar demand curve shift to the right. The Belize dollar supply curve and the Belize dollar demand curve will shift to the left.In mid-2006, a British pound sterling (the monetary unit in the United Kingdom) was worth 1.4 euros (the monetary unit in the European Union). If a U.S. dollar bought 0.55 pound sterling in 2006, what was the exchange rate between the U.S. dollar and the euro?
- The following table shows the number of U.S. dollars required to buy one euro between February 1, 2016, and September 1, 2016. Use this table to answer the following questions. Date U.S. Dollars Required to Buy 1 Euro February 1, 2016 1.1092 March 1, 2016 1.1134 April 1, 2016 1.1346 May 1, 2016 1.1312 June 1, 2016 1.1232 July 1, 2016 1.1055 August 1, 2016 1.1207 September 1, 2016 1.1218 Between February 1, 2016, and September 1, 2016, the U.S. dollar ________ against the euro, and the euro ________ against the U.S. dollar. depreciated; appreciated appreciated; depreciated neither appreciated nor depreciated; depreciated depreciated; neither appreciated nor depreciated appreciated; neither appreciated nor depreciatedIN US$ PER US$ FRI THURS FRI THURS Americas Argentina 0.0172 0.0172 58.278 58.2427 peso Brazil real 0.2431 0.2401 4.1127 4.1655 Canada dollar 0.7619 0.7612 1.3126 1.3138 Chile peso 0.001407 0.001404 710.7 712 The above table shows U.S.-dollar foreign-exchange rates in New York trading (Oct. 19, 2019). Source: Wall Street Journal. Which currency depreciated from Thursday to Friday? Which currency appreciated?Currency Values in 2015 and 2016 Canada (dollar) (peso) (yuan) (yen) Country Currency Percentage 2015 2016 0.82710.6892 0.0683 0.0538 0.1608 0.1522 |0.0080 0.0086| 36% Мexico 28% China 20% Japan 16% Based on the exchange rate table, which statement is correct? A. The Chinese yuan appreciated in value between 2015 and 2016. B. The Canadian dollar depreciated in value between 2015 and 2016. C. The Japanese yen depreciated in value between 2015 and 2016. D. The Mexican peso appreciated in value between 2015 and 2016.
- You own a local company. In the past year, you successfully expanded your sales market into Europe, and you now have profits and cash denominated in euros. You want to convert the euros to your home country currency to repatriate the profits and pay taxes. You are a. not required to convert the euros to the home currency to pay taxes. b. a demander of the euro in the foreign exchange market. c. a supplier of your home country's currency in the foreign exchange market. d. a demander of your home country's currency in the foreign exchange market.On August 8, 2000, Zimbabwe changed the value of the Zimbabwe dollar from Z$38∕US$ to Z$50∕US$. (a) What was the original U.S. dollar value of the Zimbabwe dollar? What is the new U.S. dollar value of the Zimbabwe dollar? (b) By what percentage has the Zimbabwe dollar devalued (revalued) relative to the U.S. dollar? (c) By what percentage has the U.S. dollar appreciated (depreciated) relative to the Zimbabwe dollar?What does it mean to say that the U.S. dollar has depreciated in value in relation to the Mexican peso? What does it mean to say that the Mexican peso has appreciated in value relative to the U.S. dollar?