Refer to Figure 3 for the following question. Which of the following events cause the shifts in the supply and demand curves in the market for dollars against the British pound shown in the graph above? Figure 3 Exchange rate (£/S) £0.50 0.46 A) interest rates rise in England Show Transcribed Text Figure 3 Exchange rate (£/S) £0.50 0.46 S₁ S₂ OA) interest rates rise in England B) interest rates rise in Australia C) real income rises in Australia D) real income falls in England Quantity of dollars traded 0 C S₁ D₂ Quantity of dollars traded
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- If a countrys currency is expected to appreciate in value, what would you think will be the impact of expected exchange rates on yields (e.g., the Interest rate paid on government bonds) in that country? Hint: Think about how expected exchange rate changes and interest rates affect a currencys demand and supply.3. Toyota manufactures most of the vehicles it sells in the United Kingdom in Japan. The baseplatform for the Toyota Tundra truck line is X1,650,000. The spot rate of the Japanese yen againstthe British pound has recently moved from X197/E to X190/E. How does this change the price of theTundra to Toyota's British subsidiary in British pounds?change rate $1.75 1.50 1.25 1.00 200 500 S d 700 900 950 1,000 S D₂ Quantity of euros traded (millions per day) 17) Refer to Figure 30-8. The equilibrium exchange rate is at A $1.25/euro. Suppose the European Central Bank pegs its currency at $1.00/euro. At the pegged exchange rate A) there is a shortage of euros equal to 200 million. B) there is a surplus of euros equal to 700 million. Othere is a shortage of euros equal to 500 million. D) there is a surplus of euros equal to 300 million.
- Thomas , a currency trader in East African Community, has ksh 400,000. He wishes to assess if triangular arbitrage by moving to Uganda, and Tanzania. The exchange rate quotes from the currency convertor was: 32TZ/1 KES 20UGH/IKES Agreed exchange rate between Uganda shillings and Tanzania shilling was 1.5 UGH /1TZ Compute the cross exchange rate and triangular arbitrage profit. Explain your answer.Suppose that the Bank of Canada sells 100 million euros from its foreign exchange reserves, and that the exchange rate is $1.50 Canadian per euro. The Canadian money supply will O Fall by $100 million O Fall by $150 million O Rise by $160 million O Rise by $16 million Now suppose that the Bank of Canada does not want the money supply to change. What would it need to do to sterilize its foreign exchange market operation? O Buy Canadian government bonds O Sell more from its foreign exchange reserves O Buy foreign government bonds Save & ContinueAnswer the question according to the graph below. Dollar/euro exchange rate, Ese Ese Dollar return Dollar return 2' Expected euro return Ee Expected euro return 3' 1' Esie Rates of return (in dollar terms) R R L(Rg. Yus) L(Rg. Yus) Mus Pus "us Pis 4 U.S. real money supply 1 Mus Pis Mus Pis US US U.S. real money holdings U.S. real money holdings Assume that the U.S. money supply is initially given at M'us, the price level is initially given at P'us, and the equilibrium exchange rate is initially at E's/e. US, US A permanent increase in the nominal money supply from Mus to M²us in the short-run will result in a new equilibrium at point Lütfen birini seçin: O A. 3' O B. 1' O C. 2' O D. 4'
- Which of the following statements is true? ohe demand for foreign currency in the United States increases as the volume of imports increases O The demand for foreign currency in the United States increases as the volume of exports increases O The demand for toreign currency in the United States decreases with a decrease in the inflation rate abroad. O The demund for foreign currency in the United States decreases as foreign interest rates rise O The demand for foreign currency in the United States is unaffected by U.S. demand for foreign goods and servicesThe figure shows the market for the British pound £, as the foreign currency for Japan, whose own currency is the yen, ¥. Which of the following changes would cause the demand for pounds to shift to the right, as shown? E=¥/£ E, E, `D. British aid to Japan after a Japanese earthquake. The sale of a Japanese company to a British investor. A fall in the interest rate on bonds in Japan. O An increased British demand for Japanese cars.e. None of the above O d. Interest rates in the foreign country go up O c. Interest rates in the foreign country go down O b. Interest rates in the home country go down Interest rates in the home country go up O a. EH/F: of home country currency per 1 unit of foreign country currency What wo happ if prices in the home country (H) stay unchanged and prices in the foreign country (F) go down? Use he nterest arity ondition nd he aw f ne rice o nswer uestions o 4. оо
- US $ in Canadian $ 02 D1 H J Quantity of US $ Note: If the image does not appear, right-click on the placeholder and choose Show picture or View image. Referring to the graph above, suppose that the demand for the American dollar shifts from D1 to D2. What might be the reason for this shift? a) The prices of Canadian goods and services have increased relative to American prices. b) The Canadian economy has entered a boom period. O c) The prices of American goods and services have increased relative to Canadian prices. d) The Canadian dollar has depreciated. O e) Interest rates in the USA have decreased relative to Canadian rates.Refer to the following list, and explain who will be buying Canadian dollars and who will be selling. a) a Canadian businesswoman visiting Japan The Canadian businesswoman will be selling vCanadian dollars to buy Japanese yen b) a Russian tourist visiting Cape Breton The Russian tourist will be (Click to select) v dollars to spend in Cape Breton. c) an American corporation building a new plant in Saskatoon The American corporation will be (Click to select) v Canadian dollars in order to purchase the building in Saskatoon. d) a Canadian bank expanding its operations in the United States The Canadian bank will be (Click to select) v Canadian dollars to buy American dollars to expand its operations in the U.S. (Click to select) selling buyingAnswer the question according to the graph below. Dollar/euro exchange rate, Ese Esie Dollar return Dollar return 2' 2' Ee Expected euro return Ee 4' Expected euro return 3' 1" Ege Rates of return (in dollar terms) R R L(A Yus) L(Ag. Yus) Mis Pis Mis Pis 4 U.S. real US money supply Mus Pus MUs Pus U.S. real U.S. real money holdings money holdings Assume that the U.S. money supply is initially given at M-us, the price level is initially given at P'us, the equilibrium exchange rate is initially at E'sje. US, A temporary increase in the nominal money supply from M'us to M²us in the short-run will result in a new equilibrium at point US US Lütfen birini seçin: O A. 3' O B. 2' O C.1' O D. 4'