ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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if the one-year foward rate of Australian dollar is $0.61, while the spot rate is $0.66, the expected percentage change in the Australian dollar is ______ %. if we use the foward rate to
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- If the US dollar appreciates in value vis-à-vis the NZ dollar, then, Group of answers. Exporters of goods from NZ to the US are worse off since NZ goods are now relatively more expensive. Tourists from NZ in the US are better off since their NZ dollars do not buy as much in the US as they used to. The US students who come to Auckland for an exchange semester are better off. NZ importers of US goods are better off since US goods are now relatively cheaper.arrow_forwardSuppose the price level and value of the U.S. dollar in year 1 are 1 and $1, respectively. Instructions: Enter your answers rounded to 2 decimal places.a. If the price level rises to 1.25 in year 2, what is the new value of the dollar? $______b. If, instead, the price level falls to 0.50, what is the value of the dollar?$______arrow_forwardThis question relates to the following news article New Zealand dollar drops to lowest value against US dollar since 2020 (27/09/2022) The New Zealand dollar has dropped to its lowest value against its US equivalent since March 2020. The bad news for Kiwis is that it means it'll take longer for consumer price inflation to fall. ...a weak Kiwi dollar means importing is more expensive. "While we do expect inflation rates to slowly fall from here, the longer the New Zealand dollar remains low. the slower it will take for those inflation rates to fall." ASB senior economist Mark Smith said. Six months ago the New Zealand dollar was US68.9c - now it's at US56.6c, a fall of 18 percent. Aotearoa's dollar is suffering because the US dollar is being pumped up by the US Federal Reserve lifting interest rates to tackle inflation. "interest rates globally are going up, and when rates are going up, generally people tend to look to where their money will be safest, and at the moment it's certainly…arrow_forward
- Exercise 2 You are given the following information. The current dollar-pound exchange rate is $2 per pound. A US basket that costs $100 would cost $120 in the UK. For the next year, the Fed is expected to keep US inflation at 2% and the Bank of England is expected to keep UK inflation at 3%. The speed of convergence to absolute PPP is 15% per year. Show Transcribed Text (c) How much is the dollar overvalued/undervalued?arrow_forwardIf a German firm's cost of goods sold in UK is much greater than its sales in UK, the appreciation of the Pound has a ____ impact on the firm's negative; interest expenses positive; gross profit negative; gross profit positive; interest expensesarrow_forwardExplain the impact on US export and import if the US dollar has depreciated in comparison with other currencies. For example, the exchange rate for the Canadian dollar was 1.36 per U.S dollar in 2003. Now in 2020, it is 1.31 Canadian dollars per U.S.dollar under this case the dollar has suffered a slight depreciation. Also, when the dollar has depreciated in the case of the Chinese Yuan from 8.27 in 2003 to 6.69 yuans in 2020 per U.S dollar. Also, when there is not either appreciation or depreciation from 2003 to 2020 which is the case of Saudi Arabia currency its exchange rate remains the same 3.75 Riyals per dollar since 2003. Then explain the impact of U.S. exports and imports under these scenarios.arrow_forward
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