3. The nominal exchange rate is e=48 peso per USD. The price of a Big Mac is P=$3 in the U.S., and is P*= 72 pesos in Philippine. Required: a) What is the price of a U.S Big Mac measured in pesos? b) Calculate the real exchange rate measured as Filipino Big Mac per U.S. Big Mac?
Q: If a monopoly faces an inverse demand curve of p=450-Q, has a constant marginal and average cost of…
A: A deadweight loss is an expense for society made by market shortcoming, which happens when market…
Q: Justin's demand for good 1 is given by the formula: x1d(p1,p2,I)=2⋅I/4⋅p1+6⋅p2, Suppose...…
A: Given Demand function of good 1 x1p1,p2, I=2I4p1+6p2 .. (1) Initially p1=$7, p2=$7…
Q: 2. Paul and Stella play a game with three strategies each, T, M, and B for Paul, and L, C, and R for…
A:
Q: Economics MPL Betsy's Bangles produces and sells woven bracelets. The table shows information about…
A: Answer to the three sub parts of the question is as follows:
Q: Explain the central paradox at the heart of the Solow model, with constant and exogenous…
A: The neoclassical growth approach directs general terms directing to the models for economic growth…
Q: Manufacturing highly standardized products are usually more profitable in high context cultures due…
A: Meaning of Microeconomics: The term microeconomics refers to that situation under which the…
Q: The consumers' burden associated with an excise tax will be largest when demand is OA. vertical. B.…
A: The consumer's burden associated with an excise tax will be the largest when demand is vertical.
Q: Dali enjoys cool drink (c) and steak (s) for lunch. His monthly lunch budget is R600. His total…
A: "In order to meet their needs, consumers purchase goods and services. The consumer equilibrium is…
Q: Economics In the small country of Lavinia; the GDP which means aggreagate supply is $ 120 billion,…
A: Aggregate demand = Autonomous spending * Multiplier The required increase in G i.e. government…
Q: When customers search online for information on cars from multiple sources such as Edmunds.com and…
A: Channel conflict happens when makers disintermediate their channel accomplices, like wholesalers,…
Q: Economics Bluth's preferences for paper and houses can be expressed as Ub(p, h) = 2pb + hb, while…
A: Edgeworth box is a box that shows the market of two goods and two consumers. The sides of the box…
Q: Structural unemployment A.is the increase in unemployment that occurs during recessions and…
A: Unemployment refers to a situation when people are willing to work but can not find any paid job.…
Q: Can you provide more details on the functions of monetary policy. Examples would really help
A: The monetary policy-related approach expands liquidity to make economic development. It lessens…
Q: True or false: Internal trade depends on comparative advantages?
A: Internal trade refers to the trade which occurs within the country. There are hardly any…
Q: The market for used economics textbooks is perfectly competitive, with a market supply curve given…
A: A subsidy is an incentive given by the government to individuals or businesses to improve the supply…
Q: 9. If disposable income is 4,000, consumption is 3,500, government spending is 1,000, and taxes…
A: Here, given information is, Disposable income (Y): 4,000 Consumption (C): 3,500 Government spending…
Q: Use the Corporate Income Tax information above to answer this question. A corporation has a taxable…
A: According to the question, it is given that : A corporation's taxable income = $7031822 At this…
Q: 1. What are the characteristics of a good theory? What makes a theory practical? How can an…
A: An economic theory is a collection of concepts and principles that describe how various economies…
Q: Refer to the graph shown. In the graph, a recessionary gap exists if the price level is: LAS AD₁ AD₂…
A: Aggregate supply is an economy's gross domestic product (GDP), the total amount a nation produces…
Q: Which type of medical services suffers LEAST from the uncertainty problem? preventative services…
A: Uncertainty Problem is the situation where you do something about which you are not sure which leads…
Q: B. The figure below shows the market of physician visit. Current market price for each physician…
A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…
Q: 1. Tim has borrowed money from Lisa and proposed to pay back the money in two payments. Tim…
A: Interest that is computed on the principle amount of a loan or the first deposit made to a savings…
Q: Explain/demonstrate period(s), since 2010, where the Jamaican economy experienced GDP Growth.…
A: Gross domestic product is the summation of all good and service produced in monetary value. and it…
Q: Suppose that government spending is increased at the same time when an autonomous monetary policy…
A: The aggregate supply is the total amount of services and commodities that firms in an economic plan…
Q: If a country switches from a flexible exchange rate regime to a fixed exchange rate regime, this…
A: These are two types of exchange rate systems. Fixed exchange rate refers to when a country's…
Q: If you invest $2,000 today, withdraw $1,000 in 3 years, deposit $3,000 in 5 years, deposit $1,500 in…
A: Future values refers to compounding current cash flows to the future value using formula - F V = P…
Q: 1- The below graph shows a monopolist that faces a market demand according to his cost functions.…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
Q: Today,your lecturer gives you one table that decribes the product information of one city as below.…
A: a.) Nominal GDP in 2015 = Price(2015) * Quantity (2015) = (1.40+0.50+12) *(510+1000+80) = 13.9 *…
Q: Discuss Fiat, Seingiorage and Petro Dollar
A: Currency could be a medium of exchange for merchandise and services. In short, it's money, within…
Q: TC = 116 +27Q+4Q² What is the average fixed cost when 5 units are produced? Enter as a value, ROUND…
A: Answer: Given, Total cost function: TC=116+27Q+4Q2 Fixed cost: fixed cost remains fixed in the short…
Q: Consider the Cobb-Douglas production function: 1. Derive the conditional input demands. 2. Derive…
A: Answer to question 1 is:
Q: In markets for information, which party generally has more knowledge about the value of the…
A: In the market for information, people gets information about goods and services by sellers and…
Q: If a country switches from a flexible exchange rate regime to a fixed exchange rate regime, this…
A: A floating exchange rate is determined by the market forces of supply and demand. On the other hand,…
Q: ssume a Cobb-Douglas production function, where © =0.5 and A = 1. If AN/N = 0.06, d = 0.04, and s =…
A: Production function provides the relationship between the input and the output. Cobb-Douglas…
Q: Suppose Charles owns a lawn mowing company, Assume that without workers, no yards are mowed. When he…
A: Marginal product refers to change in total product with respect to change in its variable input.
Q: 1- The below graph shows a monopolist that faces a market demand according to his cost functions.…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Suppose a closed economy has gross domestic product (GDP) of $10,000, Taxes of $3,000, Consumption…
A: National savings refer to the sum of private and public savings. When taxes exceed government…
Q: (A). Figure 1: equilibrium exchange rate is at point 1 where expected dollar returns on dollar and…
A: Exchange rate The exchange rate is the rate at which two nations' currents are changed in the…
Q: Suppose the number of people who retire is greater than the number of people who enter the workforce…
A: The unemployment rate is the level of the workforce without a task. It is a reactive result,…
Q: Quotas have the effect of O Decreasing supply, raising price, and increasing quantity O Decreasing…
A: Quotas refer to the government policy to restrict the quantity of exchange of goods between buyer…
Q: nswer the following questions using economic concepts: when most people want to know the cost of an…
A: Opportunity costs refer to the benefit that is sacrificed that would have been received from the…
Q: WAGE (Dollars per hour) 20 18 16 14 12 10 co 8 6 Supply Demand 0 0 50 100 150 200 250 300 350 400…
A: Tax burden refers to the share of tax that consumers and producers bear in the case of an imposition…
Q: 3) a) Discuss the phrase there ain't no such thing as a free lunch (TANSTAAFL) in the context of…
A: When choosing between two possibilities, a person, an investor, or a firm may suffer opportunity…
Q: Why mu Ist the margina equal to the marginal cost for a producer? Explain. ue be
A: Marginal revenue (MR) is the increase in revenue that results from the sale of one additional unit…
Q: Up Down Up Up Down Down Player 1 Player 2 In the game above, what is/are the EFFICIENT sub-game…
A:
Q: A business needs to purchase packaging equipment that will provide revenue of $120,000 per year for…
A: Loan Amount = 70000 Payable in 6 years at 12.5% . So , annual payable amount = 70000(A/P , 12.5% ,…
Q: 2-) Hypothetical monopoly costs and revenue Quantity Price Total cost $500 $400 2 450 650 3 400 950…
A: Profit Maximization refers to the condition of firms trying to minimize costs and maximize revenues.…
Q: Consider the data in the following table, which represents the total productio country Byzantium, a…
A: Nominal GDP - This is the GDP calculated with the price and quantity at current price without…
Q: Given the utility function U = 10X1.5Y0.5, a. show and discuss if the individual is experience…
A: Utility Function shows how the utility varies when the combinations of the two goods change. It is…
Q: As defined by economists, the labor resource is the human capital input into the production process.…
A: factors of production are very important in the process of production and they are Labour , Capital,…
Step by step
Solved in 4 steps
- Suppose that yesterday, the U.S. dollar was trading on the foreign exchange market at 0.75 eurosper U.S. dollar and today the U.S. dollar is trading at 0.80 euros per U.S. dollar. Which of the twocurrencies (the U.S. dollar or the euro) has appreciated and which has depreciated today?b) Suppose that the exchange rate for the Mexican peso fell from 15 pesos per U.S. dollar to 10 pesosper U.S. dollar. What is the effect of this change on the quantity of U.S. dollars that people plan tobuy in the foreign exchange market?c) Suppose that the exchange rate rose from 80 yen per U.S. dollar to 90 yen per U.S. dollar. What isthe effect of this change on the quantity of U.S. dollars that people plan to sell in the foreignexchange market?a) Suppose a computer sells for US$1,200 in the U.S. and for £855 in London. If the exchange rate is £65 per dollar, is there any arbitrage (profit opportunity)? Explain (b) If the Canadian dollar price of one Euro was C$1.30 in 2003 and the exchange rate adjusted to 0.85 Euro per C$ in 2004, did the Canadian dollar appreciate or depreciate against the Euro. Explain.10) Assume the overall US market price for retail chocolate is $7.00 per pound, and in order to attract "Chocoholic Tourists" from Europe, the Hershey company decides to lower its price to $6.00 per pound. Based on the Purchasing Power Parity theory of exchange rates, what will eventually happen the effective price of chocolate for European buyers, assuming the Euro-USD exchange rate starts at 1€ Per $1.00? Using the chart below, determine the exchange rate at which Hershey's effective chocolate prices will match those of the rest of the chocolate market? # of Lbs Chocolate Exchange Exchange Chocolate 200 Effective budget in Rate Euros Rate budget in Price Euro Euro/$ $/Euro $'s Euros will buy 200.00 € 1.00 1.00 $200 33.33 6.00 € 200.00 € 1.05 0.95 $190 31.75 6.30 € 200.00 € 1.10 0.91 $182 30.30 6.60 € 200.00 € 1.15 0.87 $174 28.99 6.90 € 200.00 € 1.20 0.83 $167 27.78 7.20 € 200.00 € 1.25 0.80 $160 26.67 7.50 € 200.00 € 1.30 0.77 $154 25.64 7.80 € 200.00 € 1.35 0.74 $148 24.69 8.10 €
- 1 Suppose that two countries, Indonesia and Vietnam, produce coffee. The currency unit used in Indonesia is the Rupiah (IDR). The currency unit used in Vietnam is the Dong (VND). In Vietnam, coffee sells for 4,500 dong (VND) per pound. The exchange rate is 1.57 VND per 1 IDR, EVND/IDR = 1.57. 2 If the law of one price holds, what is the price of coffee in Indonesia, measured in Rupiah (assume we are talking about the same type of coffee)? Please round your answer to the nearest whole number. Assume the price of coffee in Indonesia is actually 3000 IDR per pound. Compute the relative price of coffee in Indonesia versus Vietnam (round your answer to 2 decimal places). Where will coffee traders buy coffee? Where will they sell coffee in this case? How will these transactions affect the price of coffee in Vietnam? In Indonesia?Assume that in the United States $1,000 wíll buy the same basket of goods that 20,000 pesos will buy in Mexico. The U.S. dollar/Mexican Peso exchange rate is $0.04 per peso. (a) Is the U.S. dollar overvalued or undervalued? Please explain. (b) Is the Mexican Peso overvalued or undervalued? Please explain. Consider the Purchasing Power Parity theory in your answer. (Only accept typing answers) (Only accept typing answers) (Only accept typing answers)Suppose the cost of a car produced in the United States is $20,000. The current exchange rate is US$1 = €0.85. Instructions: Round your answers to two decimal places. a. What is the cost of the car in euros? b. Suppose the exchange rate changes to US$1= €0.75. What is the new euro cost of the car? € c. At the new exchange rate, the quantity of U.S. cars demanded by those holding euros will likely (Click to select) ✓ (Click to select) remain the same increase decrease
- Suppose that the US interest rate is 5.4% per annum and the interest rate in Japan is 2.8% per annum. The value of the US dollar in the spot market is ¥74 what must the forward exchange rate be (yen per US dollar) for There to be no risk less profit? (Enter the numerical value only rounding to one decimal place) The forward rate you calculate above will be different and different from the spot rate explain why it cannot be the samea. If the exchange rate changes from $1.70 per British pound (₤1) to $1.68 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. 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…If a Big Mac is selling in the United States for $3.57, what is the implied exchange rate between each of the currencies in the table? (Enter your responses rounded to two decimal places.) Big Mac Price Actual Exchange Rate 7.50 reais 1.58 reais per dollar 7.00 zlotys Implied Exchange Rate reais per dollar zlotys per dollar won per dollar korunas per dollar 2.03 zlotys per dollar 1,018 won per dollar 3,200 won 66.10 korunas 14.5 korunas per dollar According to your results, the U.S. dollar is Country Brazil Poland South Korea Czech Republic against the South Korean won and againt the Brazilian real.
- 1. The principal function of the foreign exchange market is the transfer of funds, thus purchasing power, from one nation and currency to another. 2. If it takes 116.57 yen to buy one dollar, it takes $.0085785 to buy one yen. 3. Purchasing-power parity theory postulates that the change in the exchange rate between two currencies is proportional to the change in the ratio in the two countries' general price levels. 4. The price-specie-flow adjustment mechanism operates by the deficit nation losing gold and experiencing a reduction in its money supply. 5. Monetary policy is very effective under a fixed exchange rate policy. True or FalaeIf the exchange rate between the US Dollar ($) and the Euro (E) goes from being $7/E to $6/E, we say that the US Dollar has __________ relative to the Euro. a) appreciated b) arbitraged c) stagnated d) depreciated1. In 1960 a U.S. dollar sold for 620 Italian lire. If PPP held in 1960, what would the PPP value of the exchange rate have been in 1987 if Italian prices rose 12 times and U.S. prices rose 4 times between 1960 and 1987?