Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 9P
To determine
To evaluate:
The given statement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
With aid of a diagram, explain the impact of the devaluation of the Dominican Republic dollar on the price of imported raw material on aggregate Supply and Gross Domestic Product (GDP) in the economy
The aggregate quantity of goods and services demanded changes as the price level rises because (objective D5)
Question 30 options:
real wealth falls, interest rates rise, and the dollar appreciates
real wealth falls, interest rates rise, and the dollar depreciates
real wealth rises, interest rates fall, and the dollar appreciates
real wealth falls,interest rates fall, and the dollar appreciates
real wealth rises, interest rates fall ,and the dollar depreciates
This 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…
Chapter 14 Solutions
Exploring Macroeconomics
Knowledge Booster
Similar questions
- This 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_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_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
- When a country's currency appreciates, the prices of its exports in terms of foreign currency will ______. remain constant decrease increase fluctuate randomly.arrow_forwardIf nominal GDP is $1,200 billion and, on average, each dollar is spent three times in the economy over a year, then the quantity of money demanded for transactions purposes will be Multiple Choice 3,600 1,200 800 400 600arrow_forwardSuppose we consider two countries, a home country and a foreign country. In the home country, the expected inflation rate is equal to 3.6 per cent, while the expected inflation rate abroad is equal to 4.2 per cent. Furthermore, it is known that the nominal interest rate in the home country is equal to 3.4 per cent, while the nominal interest rate abroad is equal to 4 per cent.a) First explain what is meant by absolute purchasing power parity, relative purchasing power parity and uncovered nominal interest rate parity. Then give an estimate of the expected growth in the nominal exchange rate based on each of the three theories. Finally, show that if both relative purchasing power parity and uncovered nominal interest rate parity apply, real interest rates in the two countries will be approximately equal.arrow_forward
- what happen exports when price level decrease ? Describe in paragrapharrow_forwardLast week, 6 swedish kroner could purchase one U.S. dollar. This week, it takes 8 to purchase one U.S. dollar. this change U.S. aggregate demand. in the value of the dollar will exports from the U.S. sweden and 1. decrease; increase 2. increase; increase 3. increase; decrease 4. decrease; decreasearrow_forwardWhen there is a change in price level that affects the total net exports, that is called Real money effect wealth effect ON balance of payment effect crowding out effectarrow_forward
- Consider the shift drawn in Graph B. In this graph: EHIF) EHIF) ERROM LY) ERRIM) ERR(F) MP ERR ERR(F) t LY) ERR MP E(H/F) EH/F) ERRH) LY) ERRH) B ERRIF) Mu D ERR ERRF) # Mu LI ERR The Home currency will depreciate and the Foreign currency will depreciate. The Home currency will appreciate and the Foreign currency will depreciate. The Home currency will appreciate and the Foreign currency will appreciate. The Home currency will depreciate and the Foreign currency will appreciate.arrow_forwardWhat would be the impact of an appreciating currency on aggregate demand? a) Decrease b) Increasearrow_forward3. Why the aggregate demand curve slopes downward The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of output demanded falls to $300 billion. 170 180 150 B 140 130 A 120 110 AD 100 90 100 200 300 400 500 600 700 800 REAL GDP (Billions of dollars) PRICE LEVELarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning