The equation S = I + NCO describes the savings market for an entire national economy engaged in foreign trade.  What role does currency exchange play in this savings equation and which of the 2 variables is MOST affected by appreciation or depreciation of a nation's currency?

If prices grew at a compound growth rate of 5% per annum in the United States and 0.08% per annum in Japan for the past eight years, what exchange rate represents PPP today if the two currencies, eight years ago, were in parity and exchanged at a rate of JPY 109/USD? JPY 207.3/USD   JPY 209.9/USD   JPY 74.2/USD   JPY 73.3/USD

Evaluate the usefulness of relative power purchasing parity (PPP) in predicting movements in foreign exchange rates on: a. Short-term basis (for example, three months). b. Long-term basis (for example, six years).

A company manufacturers a product in the United States and sells it in England. The unit cost of manu-facturing is $50. The current exchange rate (dollars per pound) is 1.51. The demand function, which indicateshow many units the company can sell in England as afunction of price (in pounds) is of the power type, withconstant 27556759 and exponent 22.4.a. Develop a model for the company’s profit (indollars) as a function of the price it charges (in pounds). Then use a data table to find the profit-maximizing price to the nearest pound. b. If the exchange rate varies from its current value, doesthe profit-maximizing price increase or decrease?Does the maximum profit increase or decrease?