Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 35, Problem 3TY
To determine
The effects of the given actions on the U.S. balance of payments if the exchange rates were floating.
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In the picture below is the table to the question. The highlighted one is my guess which is wrong.
Based on the Exchange rates above, which currency has become stronger or appreciated against the dollar?
A)US Dollar
B)British Pound
C)Mexican Peso(this one is wrong)
D)Candian Dollar
Travis takes two trips to Ecuador. On his first trip, he finds that one US dollar is worth 25000 Ecuadorian Sucre. On his return trip, he finds that the dollar is now worth 24000 Ecuadorian Sucre. What is a likely result of this change in exchange rates?
In the determination of currency prices and exchange rates, the market forces of supply and demand plays an insignificant role.
True
False
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- List some advantages and disadvantages of the different exchange rate policies.arrow_forwardFill in the blank. In the study of the global nature of doing business in a specific country, the floating exchange rate comes into play. A high value of the dollar means the dollar is trading for ________of a foreign currency than before. Choose one answer. less equal to more considerably lessarrow_forwardIf the money supply in Mexico is increasing much more rapidly than the money supply in the United States, holding other factors constant, what would you predict will happen to the nominal exchange rate between the Mexican peso and the United States dollar if purchasing-power parity (PPP) holds? Explain.arrow_forward
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