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- You own a local company. In the past year, you successfully expanded your sales market into Europe, and you now have profits and cash denominated in euros. You want to convert the euros to your home country currency to repatriate the profits and pay taxes. You are a. not required to convert the euros to the home currency to pay taxes. b. a demander of the euro in the foreign exchange market. c. a supplier of your home country's currency in the foreign exchange market. d. a demander of your home country's currency in the foreign exchange market.If there is a decrease in the desire of foreigners to purchase goods and services from the United States and a lower desire to invest in U.S. banks and businesses, then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would depreciate. B. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the U.S. dollar would depreciate. D. The equilibrium quantity of foreign currency would increase and the U.S. dollar would appreciate.What effect would a devaluation of a country's currency most likely have on its export volumes? A. Export volumes would decrease, as goods become more expensive in foreign markets. B. Export volumes would increase, as goods become cheaper in foreign markets. C. Export volumes would remain unchanged, as currency value does not affect trade. D. Export volumes would initially decrease, but then increase over time due to adjustments in trade agreements.
- The US and China are the two biggest economies of the world. Which of these situations will most likely increase the value of the US dollar as it trades with China? a. China’s GDP increases faster than US b. China’s exports increases sharply c. China imports more from the US than it exports to the US d. China exports more to the US than it imports from the USA. Canada produces natural resources (coal, natural gas, and others), the demand for which has increased rapidly as China and other emerging economies expand. i. Explain how growth in the demand for Canada's natural resources would affect the demand for Canadian dollars in the foreign exchange market. Explain how the supply of Canadian dollars would change. ii. iii. Explain how the value of the Canadian dollar would change. iv. Illustrate your answer with a graphical analysis. 1One of Fiji's major trading partners is Australia. If Australia's GDP rises, the demand for Fiji's exports will _____, leading to a _____ shift in the demand for the Fijian dollar. a. rise; right b. rise; left c. fall; right d. fall; left Give the answer with detail explanation.
- The value of the Russian Ruble changed from 94 to the dollar to 91 to the dollar. What is the likely effect of this change in the foreign exchange market? A. It will make Russia's imports cheaper but may harm its export competitiveness. B. It will boost Russia's exports, making them more competitive. I c. It will have no impact on trade, as exchange rates do not influence international commerce. D. It will encourage capital outflows and discourage foreign investment.40. Thailand is a net-importer. This means that they import more than they export. How does this affect the value of their currency with respect to foreign exchange? a.their currency will not be affected b.their currency will become strong c.their currency will become weak d.None of these1. Assume that the real interest rates in both Canada and India have been 5 percent. Now the real interest rate in India increases to 8 percent. a. Using a correctly labeled graph of the foreign exchange market for the Canadian dollar, show the effect of the higher real interest rate in India on each of the following. i. Supply of the Canadian dollar. Explain. iI. The value of the Canadian dollar, assuming flexible exchange rates. b. Using a correctly labeled graph of the loanable funds market in Canada, show how the increase in the real interest rate in India affects the real interest rate in Canada.
- If people expect the British pound to appreciate versus the dollar over the coming year, they will ____, and the pound will____. The US dollar will_____ versus the British pound.A. sell pounds in a year, depreciate in a year, appreciate in a year B. buy pounds today, appreciate today, depreciate today C. buy pounds in a year, appreciate in a year, depreciate in a year D. sell pounds today, depreciate today, appreciate todayestion 18 Other things the same, if the dollar appreciates relative to the Japanese yen, then A. the exchange rate falls. It will cost fewer yen to travel in the U.S. B. the exchange rate falls. It will cost more yen to travel in the U.S. C. the exchange rate rises. It will cost fewer yen to travel in the U.S. D. the exchange rate rises. It will cost more yen to travel in the U.S.Dollar Price of 1 Euro 0.90 0 Multiple Choice Quantity of Euros Demand will decrease. Demand will increase. Supply Supply will increase. D Assume that U.S. and European governments adopt a system of flexible exchange rates. The figure shows the market for euros. If more people in Europe decide to purchase U.S. cars, what effect will this have on the market for euros? Supply will decrease. Euros Demand Euros