What is the 1-year trend of the Japanese yen, the Chinese yuan, the euro, the British pound, the Swiss franc, the Argentinian peso, the Indian rupee, the Mexican peso to the US dollar? Has there been volatility, and with which currencies?
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- Give typing answer with explanation and conclusion Consider the exchange rate between U.S. Dollar and Mexican Peso: USD/MXN. Initially, the supply curve for USD is 100 + eN bln dollars per week and the demand curve is 140 - eN 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 - eN and the supply of dollars falls to 99 + eN. How should the central bank of Mexico react to this change?What are effects of US appreciation and CNY depreciation on other countries? How do other countries deal with USD and CNY to protect the economy and their currency?.What prompted the currency crises in Mexico in the mid-1990s andin many Asian economies at the end of the 1990s? What are theconsequences of the recent decision by China to let its currency, therenminbi, appreciate after it was fxed for many years relative to the dollar?
- What is the effect of the uncertainty about the future purchasing power of a currency? a. Discouraging investment and savings b. Encourages savings and investment c. No effect d. Decreases current purchasesE1 The higher the value of e, the ______________(More or less) units of foreign currency a dollar buys. When a nominal exchange rate goes up, we say the domestic currency is _________(appreciating or depreciating) against the foreign currency. When a nominal exchange rate goes down, we say that the domestic currency is _________(depreciating or appreciating) against the foreign currency.2. In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is theexchange rate between the pound and the rand? How would the exchange rate change if the oilprice jumps to GBP 50/barrel (assume no change in the price in S. Africa)?
- 11. Suppose that apples were the only good produced in the United States and Mexico. In Mexico, apples sell for 12 pesos apiece. In the Unites states, apples sell for $0.50 apiece. a. According to the theory of Purchasing Power Parity, what is the equilibrium nominal exchange rate between the U.S. dollar and the Mexican peso? What would the real exchange rate between the U.S. and Mexico in that case? b. Suppose the price of apples rises at a rate of 3% per vear in the U.S., but at a rate of 12% per year in Mexico. According to PPP, by how much should we expect the nominal U.S dollar/Mexican peso exchange rate to change in the course of 1 year (up, or down, and by what %)? c. Starting at the exchange rate you calculated in (a), and assuming the rates of inflation remain the same as in (b), what nominal exchange rate would you expect in 3 years?If the real exchange rate between Turkish lira and U.S. dollar is 3.50, the price level in Turkey is 300, and the price level in U.S. is 150, what is the nominal exchange rate between dollar and lira? Is it the dollar price of lira or the lira price of dollar?Supply Demand Supply Demand QUANTITY (dolars) These fears would cause the demand for dollars to , and the sup ply of dollars to leading to In the euro/dollar exchange rate. PRICE OF DOLLARS (euros per dollar)
- FOREX For each of the following scenarios: 1. Correctly label each graph for the foreign exchange market. 2. Determine how each scenario will affect each of the markets. 3. Clearly indicate which currency appreciates, and which currency depreciates. Scenario Show how an increase in the market for Japanese cars by American drivers would affect the market for the dollar and the market for the yen. How would an increase in Mexico's real interest rate affect the value of the peso and value of the euro How would high Page FOREX Graphs yen Appreciate/Depreciate dollar 1 appreciates/depreciates > peso appreciates/depreciates euro appreciates/depreciates appreciates/depreciates of 4Using th equilibri of the money market and the purchasing power parity What ha if the GDP of the home country (H) decreases? а. The money supply goes up O b. The money supply goes down The exchange rate (EH/F) goes up The exchange rate (EH/F) goes down None of the above е.nt. e euro the > ces 6. In the foreign exchange market in which U.S. dollars are exchanged for Mexican pesos, which of the following will occur when the demand for the U.S. dollar increases? a. The dollar will depreciate. b. The peso will appreciate. c. The supply of pesos will shift to the right. The demand for the dollar will shift to the left. e. The real exchange rate will decrease. rates • Discuss th rate regin • Describe exchange Explain h exchange
