Consider the United States and the countries it trades with the most (measured in trade volume): Canada, Mexico, China, and Japan. For simplicity, assume these are the only four countries with which the United States trades. Trade shares (trade weights) and U.S. nominal exchange rates for these four countries are as follows: Country (currency) Share of Trade $ per FX in 2015 $ per FX in 2016 Canada (dollar) 36% 0.8271 0.6892 Mexico (peso) 28% 0.0683 0.0538 China (yuan) 20% 0.1608 0.1522 Japan (yen) 16% 0.0080 0.0086 Compute the percentage change from 2015 to 2016 in the four U.S. bilateral exchange rates (defined as U.S. dollars per unit of foreign exchange, or FX) in the table provided. Use the trade shares as weights to compute the percentage change in the nominal effective exchange rate for the United States between 2015 and 2016 (in U.S. dollars per foreign currency basket). Based on your answer to (b), what happened to the value of the U.S. dollar against this basket between 2015 and 2016? How does this compare with the change in the value of the U.S. dollar relative to the Mexican peso? Explain your answer

Swedish net exports will when the price level in Sweden drops, due to the decrease; international trade effect decrease; exchange rate effect increase; PPP effect increase; exchange rate effect increase; international trade effect

The exchange rate is the price of one currency in terms of another currency. An exchange rate specifies how many units of one country's currency equal one unit of another country's currency.   Suppose the following table forecasts exchange rate data for March 16, 2020, in terms of Canadian dollars per unit of foreign currency. Use the information in the table to answer the questions that follow.   NOTE:   the options for the first drop down question are (CDN $274.10 or CDN1,824.15 or CDN 1,548.20 or CDN $548.20)   the options for the second drop down question are (increases or decreases)

eBook Problem 6-03 Consider the following information: Imports Net income from foreign investments Foreign investments in U.S. Government spending abroad Exports U.S. investments abroad Foreign securities bought by U.S. U.S. securities bought by foreigners Purchase of short-term foreign securities Foreign purchases of U.S. short-term securities $244.0 73.4 8.9 4.0 170.7 21.2 5.2 2.5 5.8 8.7 Determine the balance on the U.S. current account and capital accounts. Use a minus sign to enter the amount as a negative value. Round your answers to one decimal place. Balance on current account: $ Balance on capital account: $

Suppose the GDP of Honduras is 100,000 lempiras and the exchange rate between Honduran currency lempiras and USD is 20 lempira=$1. What is the GDP of Honduras when measured in USD?

You have the following annual data for the New Zealand economy ($bn): GDP (Y)                                                    =    184 Gross National Disposable Income (Yd)   =    171 Net exports of goods and services (NX)   =      0 Private Consumption (C)                          =    106 Government consumption (G)                   =     34   Based on this data, complete the following paragraph (enter numbers only). Investment (I) is equal to $____bn.  The current account SELECT (surplus or deficit) is equal to $_____bn.  The capital account part of the balance of payments (which for the purposes of this question includes both capital and financial accounts) therefore shows a SELECT (surplus or deficit) of $_____bn. National savings is equal to $_____bn.

Consider two countries with friendly trade relations, Canada and Mexico. Suppose that the real interest rate in Canada increases relative to Mexico. Show how the change in the real interest rate affects the equilibrium exchange rate by shifting one or both of the curves on the graph. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. EXCHANGE RATE (dollars per peso) Supply Demand QUANTITY (Millions of pesos) Demand 11 Supply

First, write out the expression for the real exchange rate. Second, explain all factors that determine the real exchange rate. (10 words max)

Suppose for Home: Ms=2488, Md/P=5723-62770*R, P=3 Suppose for Foreign:Ms=1736, Md/P=7147-65320*R, P=2 Suppose Absolute PPP holds. What is the expected exchange rate Ee? Answer: x (1.473)

The local currency in Peru is the Peruvian Nuevo Sol (PNS). In 2020, the official exchange rate between the PNS and the USD was 3 (i.e., 3 PNS = 1USD). Table 1 gives local currency prices of three goods in Peru and the United States. Table 1 also gives the expenditure shares of each good (i.e., what fraction of total expenditures do people spend on each good). Table 1. Local Prices & Expenditure Shares in Peru and the U.S. Item Expenditure Share Prices in Local Currencies Peru U.S. Corn (1 kg) T-Shirts (1 shirt) Rent (2 bedroom apartment) 0.3 6 PNS 2 USD 0.2 45 PNS 15 USD 0.5 1,000 PNS 1,000 USD 6. Calculate and report the Purchasing Power Parity (PPP) exchange rate between the PNS and the USD. PPP Exchange Rate: 7. Peru's GDP per capita in 2020 was 18,000 PNS. Calculate and report Peru's GDP per capita in USD using the Official Versus PPP exchange rates. Peru's GDP per capita in USD using Official Exchange Rate: Peru's GDP per capita in USD using PPP Exchange Rate: 8. Use the space…