Suppose the exchange rate between the South African Rand (R) and the United States Dollar ($) changed from R10 per $1 to R15 per $1. If domestic prices remain the same, what would be the effect of this situation on the Rand and South Africa's imports? Select one: a. A depreciation of the Rand, making South African imports from the United States more expensive b. A depreciation of the Rand, making South African imports from the United States cheaper c. The Rand would buy three times more goods than before the change occurred d. Appreciation of the Rand, making South African imports from the United States cheaper..

Question 2 Suppose that the demand for rice in Japan is given by the function Q = 100 -p and the domestic supply is Q = p. Suppose that the inverse world supply function is p = 30. (a) What would be the change in domestic producer surplus if imported rice is banned? (b) What would be the change in consumer surplus if a $5 tariff is imposed on imported rice? (c) What would be the change in imports if a $5 tariff is imposed on imported rice? (d) What would be the smallest tariff to completely eliminate imported rice? (e) A $5 per unit tariff has the same effect on producer and consumer surplus as a quota of

The United States has enjoyed a trade surplus during the last two decades.True or False

Consider a small open economy producing a good which is an imperfect substitute for a foreign good. There are five categories of agents: firms, households, commercial banks, the central bank, and the government. The world price of the foreign good is taken as exogenous and normalized to unity. The nominal exchange rate, E, is flexible. The supply of the domestic good is given by YS * =YS * (PD) * Where PD is the price of the domestic good and YS = d YS’ /d PD > 0   Investment, I, is financed by bank loans and is defined as 1 = I(iL) Where iL is the loan rate and I’ < 0   Households hold three categories of assets: cash (which bears no interest), deposits with domestic banks, and foreign-currency deposits abroad. Assets are imperfect substitutes. Household financial wealth, F ^ H is defined as: FH = M+D+E.D* Where M is cash holdings, and D (respectively, D*) domestic (respectively, foreign) deposits.   The demand for deposits is M / D = m, Where ID is the interest rate on…