Among the reasons that Sweden should not adopt the euro is that Multiple Choice Swedish exporting firms can avoid exchange-rate risk by setting prices (that are charged to buyers in euro-area countries) in euros Sweden's government will have to impose capital controls on financial transactions with other euro-area countries if Sweden adopts the euro. the Swedish central bank is highly competent and effective transactions cost will be lower if Sweden keeps its own currency

Among the reasons that Sweden should not adopt the euro is that Multiple Choice Swedish exporting firms can avoid exchange-rate risk by setting prices (that are charged to buyers in euro-area countries) in euros Sweden's government will have to impose capital controls on financial transactions with other euro-area countries if Sweden adopts the euro. the Swedish central bank is highly competent and effective transactions cost will be lower if Sweden keeps its own currency

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 25CTQ: If a countrys currency is expected to appreciate in value, what would you think will be the impact...

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What is the difference between a floating exchange rate, a soft peg, a hard peg, and dollarization?
Does a higher rate of return in a nations economy, all other things being equal, affect the exchange rate of its currency? If so, how?
If a countrys currency is expected to appreciate in value, what would you think will be the impact of expected exchange rates on yields (e.g., the Interest rate paid on government bonds) in that country? Hint: Think about how expected exchange rate changes and interest rates affect a currencys demand and supply.
This chapter has explained that one of the most economically destructive effects of exchange rate fluctuations can happen through the banking system, if banks borrow from abroad to lend domestically. Why is this less likely to be a problem for the U.S. banking system?
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If the government wants to O decrease; contractionary O increase; expansionary O increase; only rules-based O decrease: expansionary the value of its currency in the foreign exchange market, it can use monetary policy.
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Question 10 d Anwser only question d please thank you Assume that there is a free-floating exchange rate. Will the following cause sterling toappreciate or depreciate relative to other currencies? In each case, you should considerwhether there is a shift in the demand or supply curves of sterling (or both) and whichway the curve(s) shift(s). You may assume that the impacts are ceteris paribus, that is,everything else remains the same. Illustrate your answers and give a short explanation interms of currency supply and demand.(a) UK imports increase. (b) UK interest rates rise relative to those abroad. (c) The UK experiences lower inflation than other countries, but with no change in interestrates. (d) Forex speculators believe that the Pound sterling will depreciate.
E1 The higher the value of e, the ______________(More or less) units of foreign currency a dollar buys. When a nominal exchange rate goes up, we say the domestic currency is _________(appreciating or depreciating) against the foreign currency. When a nominal exchange rate goes down, we say that the domestic currency is _________(depreciating or appreciating) against the foreign currency.