The value of the currency of Country X appreciates relative to the currency of Country Y. How will US O A Producers in Country Y will benefit from a decline domestic competition OB Producers in Country X will benefit from increased consumption of their goods in Country Y. O C. Producers in Country X will benefit from a decline domestic competition. O D Producers in Country Y will benefit from increased consumption of their goods in Country X.

The value of the currency of Country X appreciates relative to the currency of Country Y. How will US O A Producers in Country Y will benefit from a decline domestic competition OB Producers in Country X will benefit from increased consumption of their goods in Country Y. O C. Producers in Country X will benefit from a decline domestic competition. O D Producers in Country Y will benefit from increased consumption of their goods in Country X.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter29: International Finance

Section: Chapter Questions

Problem 8P

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Canada is both an importer and an exporter of cars. If Canada exports more cars than it imports and the price of cars rises, then ceteris paribus, Canada's terms of trade... Deteriorates because the gain in imports more than offsets the loss of exports. o b. Remains the same because the index of export prices rises by the same amount as the index of import prices. O c. Improves because the index of export prices rises and the index of import prices falls. o d. Improves because the index of export prices rises more than the index of import prices. Deteriorates because of the loss of exports that would result.
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A balance of payments is O the arbitrage potential caused by difference in real prices of goods in different countries. O a register of all trade between two nations. O a record of all payments between one nation and the rest of the world. O the account of all payments for goods and services from one nation to another. O the difference in exchange rates between two currencies.
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In 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 Peso
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