1.1 What is the difference between the nominal exchange rate and the real exchange rate? When a newspaper article uses the phrase “the exchange rate,” is the article typically referring to the nominal exchange rate or the real exchange rate? 1.2 What is the difference between a direct quotation of an an exchange rate and an indirect quotation? If the exchange rate between the yen and the dollar changes from ¥80 = $1 to ¥90 = 1, has the yen appreciated or depreciated against the dollar? Has the dollar appreciated or depreciated against the yen? 1.3 Suppose that the euro falls in value relative to the dollar. What is the likely effect on European exports to the United States? What is the likely effect on U.S. exports to Europe? No plagiarism I’m really stuck it’s hard for me to understand please help

The NEWS magazine uses the price of a Mercedes Benz A-class to determine whether a currency is undervalued or overvalued. In July 2019, the price of Mercedes Benz was $55 thousand in New York, 390 thousand yuan in Beijing, and 66.5 thousand Swiss francs in Geneva. The exchange rates were 6.79 yuan per U.S. dollar and 0.96 Swiss francs per U.S. dollar. a. Does the purchasing power parity hold? Was yuan undervalued or overvalued relative USdollar? Explain your answer and show the calculation.  b. Do you think the price of a representativeness car, Mercedes Benz in different countriesprovides a valid test of purchasing power parity?

Coffee grown in Guatemala is priced at 19 Guatemalan quetzal per pound (Guatemalan quetzal, or GTQ, is the currency of Guatemala). Comparable coffee grown in the U.S. is priced at $6.20 per pound. One Guatemalan quetzal trades for $0.13 in the foreign exchange market. Find the real exchange rate from the perspective of the United States and from the perspective of Guatemala, and determine which country's coffee is more competitively priced? Instructions: Enter your responses rounded to two decimal places. Real exchange rate from the perspective of the U.S. is ☐ Real exchange rate from the perspective of Guatemala is Coffee is more competitively priced in (Click to select)

The Big Mac index is used as a rough measure of purchasing power parity across countries. The Economist magazine recently included the Vietnamese dong in its calculation of the Big Mac index. A Big Mac costs $5.06 in the United States but only 60,368 dong or $2.66 in Vietnam (at the current exchange rate). What does this information suggest about the value of the real exchange rate of the U.S. dollar relative to the Vietnamese dong (treating the United States as the domestic economy, so the nominal exchange rate is expressed as dong per dollar)? Is the real exchange rate likely to be greater than or less than 1?

The following paragraphs discuss the impact of various economic events on the exchange rate.  Complete the paragraphs by filling in the blanks.  Use any of the words from the following list (you can use each of these words as many times as you wish): demandsupplyleftrightbuysellimportsexportsrisefallincreasesdecreases What happens to the exchange rate when the current account balance falls?A falling current account balance means that the value of ____ are rising relative to _____.  Let's assume that one does rise and one does fall to cause the current account balance to fall. _____ affects the ____ for/of $NZ so a decline in this means ____ for/of $NZ shifts left.  _____ affects the Answer for/of $NZ so a rise in this means _____ for/of $NZ to shift right.  The combined effect from the fall in the current account balance is that we expect the value of the $NZ to ____.  What happens to the exchange rate when New Zealand interest rates fall relative to the rest of the world?A fall in NZ…

Suppose purchasing power parity is true. What happens to the nominal exchange rate if the price of domestically produced goods (in terms of domestic currency) rises? What happens to the real exchange rate?

The euro/dollar exchange rate is 1 euro = $1.20. According to the law of one price, a camera that sells for $240 in New York should sell for how many euros in Germany?

The following paragraphs discuss the impact of various economic events on the exchange rate. Complete the paragraphs by filling in the blanks. Use any of the words from the following list (you can use each of these words as many times as you wish but choose carefully - your sentence must make grammatical sense):demand   supply left right buy sell imports exports rise fall increases decreases   What happens to the current account balance and the exchange rate when the following happens?   Suppose that New Zealand firms become more profitable relative to foreign firms and so increase their payment of dividends (everything else held constant). The value for net foreign income therefore ________ and the value of the current account balance will _______.   Payment of NZ dividends to foreign owners affects the _______ or/of $NZ while payments of foreign dividends to NZ owners of foreign companies affects the _______ for/of $NZ.   Therefore the impact of the change in profit of NZ firms is…

If the domestic prices for traded goods rose 40 percent over 10 years in China and 25 percent over those same 10 years in the United States, what would happen to a freely floating Chinese yuan/U.S. dollar exchange rate? Why?

An exchange rate is the domestic price to purchase one unit of a foreign currency. For example, how much does it cost in Canadian dollars to buy one US dollar? There are various economic theories to predict exchange rates. The simplest theory is known as the Law of One Price or also known as Absolute Purchasing Power Parity (PPP). Use absolute PPP and the price of a Big Mac in different countries to complete the table below and to predict whether the local currency is over or undervalued compared to the US dollar. Country USA Canada Saudi Arabia Brazil Italy Source: The Economist Big Mac Price in Local Currency $4.62 $5.54 SR 10 R$ 12 €3.75 Current Market Exchange Rate e 1.10 3.75 2.27 0.74 Exchange Rate Predicted by PPP and Big Mac ê According to the table above, an arbitrageur in Brazil could make money by If the Big Mac Index were accurate for other tradeable goods and services, Brazil's AD curve would O Local Currency should... the US. 수 + 8°C. Clou