7.When comparing per capita income in different countries, is the currencies exchange rate a good measure? a. Yes because it is precise b. Yes because it represents the value of one good in a different currency c. No because it is subject to monetary shock d. No because it doesn’t account for the value of non-traded goods

Q: The ‘current account’ includes records of a country’s: Select one: a. net exports. b. net primary…

A: Current account plays a major role in understanding how an economy is performing in a given time…

Q: Question: In an economy with a high dependency on tourism, which faces a prolonged period of border…

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Q: 1. From the perspective of the domestic country, an increase in the nominal exchange rate will cause…

A: Nominal exchange rate: The rate at which one currency is exchanged to another one then it is known…

Q: One method for a deficit country to correct the situation under a fixed exchange rate system is to…

A: Exchange rate is the value of one currency in terms of other currency. There are two types of…

Q: When a foreign currency/the Euro depreciates a. Foreign goods become more expensive for Americans b.…

A: It is said that foreign currency/the Euro depreciates. We are asked that what will happen to the…

Q: What is a single currency?

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Q: There has been a 9% increase in the U.S. Consumer Price Index (which measures the average price…

A: Nominal exchange rate is the rate at which the currency of one country is exchanged for the other…

Q: A negative value for the line item "Changes in official international reserves" in the balance of…

A: The objective of the question is to understand what a negative value for the line item 'Changes in…

Q: a. Explain why in an economy with fixed exchange rates, monetary policy will not cause expenditure…

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Q: Which of these would cause the value of the Euro to rise? a. A rise in the Euro zone inflation rate…

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Q: Which of the following companies would gain from foreign currency depreciation?   a. Companies that…

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Q: E1 The higher the value of e​, the ______________(More or less) units of foreign currency a dollar…

A: Definition of exchange rate is that, the amount pf home is currency required to buy a unit of…

Q: Based this table, what is the value of the trade balance?   a. $100 b. -$100 c. -$55 d. $55

A: Trade balance = Export of goods and services – import of goods and services. = 400 – 500 = -100

Q: Purchasing power parity may not hold in practice due to

A: Purchasing power parity (PPP): This theory states that the law of one price holds in long run. It…

Q: A negative value for the line item "Changes in official international reserves" in the balance of…

A: The objective of the question is to understand what a negative value for the line item 'Changes in…

Q: 43

A: The investment in the goods or services or financial assets or companies outside the domestic…

Q: What impact does a depreciation of a country's currency have on its balance of trade? A. It…

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Q: 1. Which of the following falls under the current account of the Philippines? a. The value of the…

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Q: 1. A fundamental problem in international economics is how to produce a world government that can…

A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…

Q: In 2018, Belize had a GDP of 4 billion Belize dollars, and a population of 400,000 people. The…

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Q: Use Figure 5.1 below to answer the next three questions: real interest rate A B C S+T-G I I,S,X 17.…

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Q: A new country has been established on the moon and created a currency called cheesybits. Which of…

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Q: The Current Account DOES NOT include: a. Portfolio Investment b. Net income investments in other…

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Q: In the long run, exchange rates are typically affected by A. bond investors who seek long-term…

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Q: Practice Questions 1. What is meant by the balance of payments? 2. What economic transactions give…

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Q: Which of the following are direct foreign investments, and which are not? Event a. A French company…

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Q: The quantities of goods and services exported and imported are recorded in the balance of payments…

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Q: Within the Eurozone, a country cannot change its exchange rate to re-establish the competitiveness…

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Q: 3. What are some differences between the gift economy and the exchange economy?

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Q: Under a system of fixed exchange rates, what happens if a country's currency is overvalued? a. The…

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Q: What is the term for the difference between the value of a country's exports and the value of its…

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Q: When a group of countries form a Common Currency (such as the Euro), which of the following is NOT…

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Q: Suppose that the real exchange rate between Canada and Tanzania is defined in terms of baskets of…

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Q: 1. What is the difference between economic growth and economic development? 2. What is unemployment,…

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Q: 3. If a rise in trade deficit results from a decrease in the quality of your country's products. a.…

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Q: Why would a country want to impose an exchange rate ceiling?   a. A strong currency encourages…

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Q: The advantage of a system of fixed exchange rates over one where exchange rates are flexible is that…

A: Fixed Rate System. In a fixed exchange rate system, the value of a currency is locked into (pegged)…

Q: If for some reason Americans desired to increase their purchases of foreign assets, then other…

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Q: Suppose there is a slowdown in economic activity worldwide and many foreign governments decide to…

A: An increase in government spending has a significant impact on the economy.

Q: Why does purchasing-power parity theory NOT hold at all times? Select one: O a. because prices are…

A: Purchasing-power parity theory states that the exchange rate between two countries should adjust to…