Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 34, Problem 7MCQ
To determine
The concept of
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If the exchange rate between the United States dollar and the Indian rupee changes from $1=60 rupees to $1=10 rupees, ceteris paribus, one would anticipate that ___________.
Group of answer choices
A) India’s exports to the United States increase
B) the current account in the United States’ balance of payments stays the same
C)the trade deficit in the United States increases
D)the United States’ imports from India increase
E)the United States’ exports to India increase
A change in the euro-dollar exchange rate from $1 per epro to $2 per euro would
price of German goods, the number of German goods that would be demanded in the U.S.
the U.S.
O decrease; reducing.
O decrease; increasing.
O increase; reducing.
O increase; increasing.
Demand for imports (before $-devaluation)
Demand for imports (after $-devaluation)
Price of imports, in foreign currency (before $-devaluation)
Yes
No
USA Japan
400
600
200
10
800
100
Suppose the $ is devalued: we go from Yen = $1/100 to Yen = $1/10. Does the Marshal-Lerner condition hold in this example?
Chapter 34 Solutions
Foundations of Economics (8th Edition)
Ch. 34 - Prob. 1SPPACh. 34 - Prob. 2SPPACh. 34 - Prob. 3SPPACh. 34 - Prob. 4SPPACh. 34 - Prob. 5SPPACh. 34 - Prob. 6SPPACh. 34 - Prob. 7SPPACh. 34 - Prob. 8SPPACh. 34 - Prob. 9SPPACh. 34 - Prob. 10SPPA
Ch. 34 - Prob. 1IAPACh. 34 - Prob. 2IAPACh. 34 - Prob. 3IAPACh. 34 - Prob. 4IAPACh. 34 - Prob. 5IAPACh. 34 - Prob. 6IAPACh. 34 - Prob. 7IAPACh. 34 - Prob. 8IAPACh. 34 - Prob. 1MCQCh. 34 - Prob. 2MCQCh. 34 - Prob. 3MCQCh. 34 - Prob. 4MCQCh. 34 - Prob. 5MCQCh. 34 - Prob. 6MCQCh. 34 - Prob. 7MCQCh. 34 - Prob. 8MCQ
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- = A nation has a favorable balance of trade when Listen it has a surplus in its balance of payments. it has a deficit in its balance of payments. the value of its imports is greater than the value of its exports. merchandise exports exceed merchandise imports. it has high tariffs. Karrow_forwardIn our pretend world there are two countries - Chile and Switzerland - that are engaged in trade. The firm Switzerland Chocolates Express sells Boxes of chocolate (a good) in Chile. Each Box of Chocolates sells for 6500 Chilean pesos in Chile. In Switzerland, each box of chocolates 11 Swiss Franc to produce. Assume that the firm has 1 million boxes of chocolate to sell. How much money (in Swiss Franc) would the firm make (or lose) on the sale at the following exchange rates: Rate 1: 550 Pesos per Swiss Franc Rate 2: 0.0015 Swiss Franc Per Chilean Pesoarrow_forward(1) a. If the exchange rate changes from $1.70 per British pound (₤1) to $1.72 per ₤1, has the pound (₤) appreciated or depreciated? Has the dollar appreciated or depreciated? b. What happens to the ₤-price that British residents pay for a $500 U.S. export good due to the exchange rate change above? c. What happens to the $-price that U.S. residents pay for a ₤1200 import good from Britain? d. How do these changes affect the economic welfare of U.S. exporters and U.S. importers? (2) Suppose that the euro (€) appreciates from $1.00 per €1 to $1.20 per €1. Determine whether the underlined individuals listed below would see that appreciation as a good or a bad thing. a. A U.S. business buys €10,000 of chemicals from a German company. b. An Italian clothing company buys $100,000 of leather from a U.S. leather maker. c. A U.S. resident has a retirement account totaling €500,000 in a German bank. d. A U.S. company must make an interest payment of €25,000 to the French bank from which it…arrow_forward
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