After the August 2019 primary elections in Argentina, foreign investors perceived increased political risk. The demand for the peso _____, and the peso _____. Group of answer choices fell; appreciated rose; depreciated fell; depreciated rose; appreciated
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- Currently the foreign exchange market is valuing the Canadian dollar at Ez while the Canadian government has placed a value of Epar on the Canadian dollar. Exchange rate Er (Euro/$C) E3 E2 Enar D3 E1 D2 D1 Quantity of Domestic Assets The Canadian dollar value (Epar) placed by the Canadian government is said to be relative to the market value (E3). 수 One approach to close the gap between E3 and Epar is for the BOC to 수 The approach taken by the BOC wll : Ms and cause i-rates to As a result of the i-rate change the internal mechanism: Gross Investment (I) will 수 AD (Aggregate Demand) will GDP will and Pievel (inflation) will As a result of the i-rate change the external mechanism: The new i-rates will cause foreigners to 수 Canadian bonds. The change in demand for Canadian bonds will cause the demand for $C to AD (Aggr Demand) will GDP will and Plevel (inflation) willWhen a country's currency appreciates, the prices of its exports in terms of foreign currency will ______. remain constant decrease increase fluctuate randomly.If the U.S. Dollar appreciates, foreigners will find American goods more expensive because they have to spend less for those goods in USD, meaning with higher prices, the number of U.S. goods being exported will likely drop and leads to a reduction in the Gross Domestic Product (GDP). True or False
- (a) An analyst argues that exchange rate movements depend on interest rate differentials (that is, the International Fisher effect), country-specific economic policy uncertainty measures and country-specific GDP growth rates. With this in mind, the analyst estimates the following model:Expected rate of appreciation of yen against the dollar(%)= =0.5[idollar(%) – iyen(%)]+0.5[idollar(%) – iyen(%)]2+0.2[σUS(%) – σJAP(%)]++0.2[σUS(%) – σJAP(%)]2+0.1[GDPJAP(%) – GDPUS(%)].In this model, idollar(%) is the one-year interest rate in the US, iyen(%) is the one-year interest rate in Japan, σUS(%) refers to economic policy uncertainty in the US, σJAP(%) refers to economic policy uncertainty in Japan, GDPUS(%) refers toannual GDP growth in the US and GDPJAP(%) refers to annual GDP growth in Japan. Assume idollar=6%, iyen=4%, σUS=5%, σJAP=1%, GDPUS=2% and GDPJAP=1%. Calculate the expected rate of appreciation of the yen against the dollar. Explain your findings in no more than 200 words .(b) An…(a) An analyst argues that exchange rate movements depend on interest rate differentials (that is, the International Fisher effect), country-specific economic policy uncertainty measures and country-specific GDP growth rates. With this in mind, the analyst estimates the following model: Expected rate of appreciation of yen against the dollar(%)= =0.5[idollar(%) – iyen(%)]+0.5[idollar(%) – iyen(%)]2+0.2[σUS(%) – σJAP(%)]+ +0.2[σUS(%) – σJAP(%)]2+0.1[GDPJAP(%) – GDPUS(%)]. In this model, idollar(%) is the one-year interest rate in the US, iyen(%) is the one-year interest rate in Japan, σUS(%) refers to economic policy uncertainty in the US, σJAP(%) refers to economic policy uncertainty in Japan, GDPUS(%) refers to annual GDP growth in the US and GDPJAP(%) refers to annual GDP growth in Japan. Assume idollar=6%, iyen=4%, σUS=5%,σJAP=1%, GDPUS=2% and GDPJAP=1%. Calculate the expected rate of appreciation of the yen against the dollar. Explain your findings in no more than 200 words.…N N QUESTION 3 Consider the exchange rate between U.S. Dollar and Mexican Peso: USD/MXN. Initially, the supply curve for USD is 100+ e bln dollars per week and the demand curve is 140-e bln dollars per week. There is a financial crisis in Mexico and the government fears that it may lead to capital outflows that would make the crisis even worse. They decide that if Mexican Peso depreciates by more than 20%, the central bank will step in and fix the exchange rate. As the crisis unfolds the demand for the U.S. dollars increases to 142-e and the supply of dollars falls to 99+ e How should the central 'N' bank of Mexico react to this change? N O A. start selling U.S. dollars to support the exchange rate O B. start buying U.S. dollars to support the exchange rate O C. reduce money supply in the economy O D. do nothing
- An increase in the demand for US goods imported into South africa will have the following impact in the South African market: The increased demand for US goods will lead to a decrease in the demand for dollars. True FalseWhen exports exceed imports, all of the following are true except: net foreign investment is positive. net exports are positive. O the country is a net debtor nation. there is a financial capital outflow.With the advent of NAFTA, Cranford Manufacturing has a U.S. division and a Mexico division. Each division builds specialty components that are used by both divisions. For each dollar in sales by the U.S. division, Mexico furnishes $0.20 in components, and for each dollar in sales of the Mexico division, the United States furnishes $0.05 in components. Each division uses $0.10 worth of its components in its own division. Find the value of the components each division must produce to support external sales of $200 million by the U.S. division and $180 million by the Mexico division. Give your answer in millions of dollars. Report only the number, not the units. I
- Kindly answer in narrative form. Please cite your sources. Thank you so much!1. What are the GNP and Per capita GNP in Denmark?2. What Type of Currency does Denmark have? and what is the relation to US Currency?Suppose that today the exchange rate between the U.S. dollar and the Chinese yuan is $1 = 6.2 yuan. If next week the exchange rate is $1 = 7 yuan, it is clear that: A)The yuan has depreciated relative to the dollar. B)The dollar has depreciated relative to the yuan. C)The dollar has appreciated relative to the yuan. D)Both currencies have appreciatedChina and India are trading partners, and there are international savings flows between the two countries. China’s currency is the yuan and India’s currency is the rupee. If interest rates in China begin to rise relative to those in India, which of the following changes can we expect to see in the Indian foreign exchange market? Selected Answer: Demand for the Chinese yuan would fall. Answers: Demand for the Chinese yuan would fall. Demand for the Indian rupee would rise. Supply of the Indian rupee would fall. Supply of the Chinese yuan would fall.