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If consumers demand more currency, which will increase?
a. Investment spending
b. Real interest rate
c.
d. Bank deposits
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Solved in 3 steps
- An increase the U.K. interest rate the demand for U.S. dollars and so the U.S. dollar O a. does not change; does not change O b. decreases; appreciates O c. increases; appreciates O d. increases; depreciates O e. decreases; depreciatesThe value of a country's currency may increase by A. a stock market rally in that country. B. continuous excessive government spending. C. an increase in that country's money supply. D. More than one of the options is correct.Assume that Eurodollar deposit offer a rate of return of 10% while dollar deposit in US Bank offer 8% rate of return. What will happen the value of USD against EUR? Make sure that you use demand supply diagram to explain such impact.
- Need answer ASAP... Purchasing power measures the value of a currency in terms of ____. a. the quality of products that one unit of money can buy b. All of the above. c. the quantity of products that one unit of money will procure d. the quantity and quality of products that one unit of money will purchaseWhich problem associated with barter transactions is reduced when people conduct these transactions with money? A. Local sales taxes B. Deflation C. Transaction costs D. InflationIf demand for the dollar is high, the price of the dollar is most likely to remain stable O fall, then rise fall rise
- Nigeria is the world’s biggest producer of roses. The global demand for rosesincreases and at the same time Colombia’s central bank increases the interest rate.In the foreign exchange market for Nigerian naira, what happens to:i. The demand for naira?ii. The supply of naira?b. At this equilibrium level of income and interest, compute the levels of disposal income, total transactions demand for money, investment demand and the value of next exports.The value of the U.S. dollar typically increases when the (select all that apply) A. global economy is strong. B. U.S. economy is strong. C. global economy is weak. D. U.S. economy is weak.
- What is bought and sold in the foreign exhange market?3. There is a group of economists who argue that the US should return to what’s called a “gold standard”. According to this policy approach, the dollar price of gold is always kept the same, so that we can think of the prices of goods and services as really being denominated in ounces of gold. In this problem, you’ll do a simple calculation that suggests possible problems with this approach. a. Using FRED, calculate how much the dollar price of an ounce of gold rose (in percentage terms) from December 2007 to December 2010. b. Using FRED, calculate how much the Consumer Price Index (CPI) rose (in percentage terms) from December 2007 to December 2010. c. How did the price of the CPI bundle of US goods and services, expressed in terms of ounces of gold, rise or fall (in percentage terms) from December 2007 to December 2010? d. Suppose that the US had been on the gold standard from December 2007 to December 2010, so that prices of goods and services were denominated in terms of ounces of…Refer to the following list, and explain who will be buying Canadian dollars and who will be selling. a) a Canadian businesswoman visiting Japan The Canadian businesswoman will be selling vCanadian dollars to buy Japanese yen b) a Russian tourist visiting Cape Breton The Russian tourist will be (Click to select) v dollars to spend in Cape Breton. c) an American corporation building a new plant in Saskatoon The American corporation will be (Click to select) v Canadian dollars in order to purchase the building in Saskatoon. d) a Canadian bank expanding its operations in the United States The Canadian bank will be (Click to select) v Canadian dollars to buy American dollars to expand its operations in the U.S. (Click to select) selling buying