otherwise downvote switches from a flexible exchange rate regime to a fixed exchange rate regime, this implies that: change in government spending will now have a greater effect on output cal and monetary policy will become more effective in changing GDP cal and monetary policy will become completely ineffective in changing GDP ry policy will become a more effective tool for changing output change in government spending will now have a smaller effect on output

otherwise downvote switches from a flexible exchange rate regime to a fixed exchange rate regime, this implies that: change in government spending will now have a greater effect on output cal and monetary policy will become more effective in changing GDP cal and monetary policy will become completely ineffective in changing GDP ry policy will become a more effective tool for changing output change in government spending will now have a smaller effect on output

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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True/False and Explain The exchange rate between two countries can be thought of as unrelated to any economic variables.
What is purchase power parity? Do you know any informal measure of PPP, explain how and what it measures?
Give reasons, supported with clear explanations, why countries opt for a floating exchange rate?
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Purchasing Power Parity (PPP) implies that the level of exchange rates adjusts so that identical goods cost the same amount in different countries. In many cases, the PPP is violated. Briefly explain drawing on the assumptions of absolute PPP. You are the trade advisor to a multinational company with an investment of US1,500,000. The following are the rates quoted on the FOREX market. US $ to Euro 1.22/€ US$ to pounds 1.84/£ Euros to pounds 1.54/£ Calculate the cross rate and determine if a profit opportunity exists. What is the value of that profit if you decide to trade with the US$1.5 million?
For each of the following transactions that may by themselves change the sum of the Canadian current account balance, CA, and the Canadian capilal account balance, KA, give an example of an offsetting transaction that would leave CA + KA unchanged. a. The Canadian government sells military equipment to a foreign govenment. An example of an offsetting transaction is: O A. Kuwait pays for the services of a Canadian team of oil fire fighters, which is a positive entry in the current account. O B. Canadian citizens buy cars from the foreign country, which is a negative entry in the current account. O C. A foreign bank buys Canadian government bonds, which is a negative entry in the capital account. O D. No transaction needed.
Suppose, in the New Keynesian open economy model, that there is a negative shock in future total factor productivitv and there are no capital controls. a) Under a flexible exchange rate, what are the equilibrium effects? b) Now suppose that there is a fixed exchange rate. Repeat part(a)
Which one is corre
How and why will switching from a flexible to fixed exchange rate regime affect exports as a percentage of GDP/ Exports-GDP-ratio
How would I find the actual exchange rate to answer the bottom part of the data shown.