Considering the foreign exchange market, identify at least THREE causes for a decrease in the demand for dollars.

Topics 6.2-6.5 New Currency Problems. Each of the determinants is used once. 1. Residents and businesses of the US are asked to boycott goods made in Iran due to political tensions between the two countries. Besides oil, the US receives plastics, iron, fruits and vegetables, salt, and copper from Iran. Graph the Dollar and Iranian Rial markets as a result of the boycott. What happens to future US exports to Iran after the currency values change? 2. Assume that the US does go into a mild recession. Assume that the Euro zone avoids a similar recession and continues its growth rate. Graph the Dollar and Euro markets. From the US perspective.

Which of the following would increase the U.S. demand for foreign currency? a. an increase in U.S. real interest rate b. an increase in incomes abroad c. a decrease in the U.S. demand for foreign goods d. an increase in the U.S. demand for foreign goods e. a decrease in U.S. income O Icon Key Ox 0 F8 F9 prt sc F10

A. Canada produces natural resources (coal, natural gas, and others), the demand for which has increased rapidly as China and other emerging economies expand. i. Explain how growth in the demand for Canada's natural resources would affect the demand for Canadian dollars in the foreign exchange market. Explain how the supply of Canadian dollars would change. ii. iii. Explain how the value of the Canadian dollar would change. iv. Illustrate your answer with a graphical analysis. 1

Due to the increase in the productivity of Omanis in the technology sector, the rate of exports of technological services has increased. How will this affect the value of the Omani Rial and the US dollar? a. Stronger rial and weaker dollar b. weaker rial and stronger dollar С. both currencies will increase in value d. the increase will be cancelled out by each other

36. When a country's goods and services are expensive relative to other countries', we say that its currency is ________ in terms of purchasing power parity.   Question 36 options:   a)  irrational   b)  rational   c)  overvalued   d)  undervalued

1. Will A Canadian forestry company selling on world markets have a higher or lower exchange rate for the Canadian dollar? Explain why. 2. Will a Canadian company that must import equipment from abroad will have a higher or lower exhange rate for Canadian dollar? Explain why. 3. Make a summary list of the causes and remedies for low levels of economic development.