yen per U.S. dollar to 71 yen per U.S. dollar. What is the effect of this change on the quantity of U.S. dollars that people plan to sell in the foreign exchange market? Tale falls Tr The quantity of U.S. dollars that people plan to sell in the foreign exchange market O A. decreases and the supply curve of U.S. dollars shifts leftward B. increases and the supply curve of U.S. dollars shifts rightward C. increases and a movement up along the supply curve for U.S. dollars occurs D. decreases and a movement down along the supply curve of U.S. dollars occurs
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- The supply of U.S. dollars on foreign exchange markets is A. derived from the supply of U.S. goods. B. determined directly by open market operations at the Federal Reserve Bank. C. derived from the demand for U.S. products by foreigners. D. derived from the demand by United States for imported goods and services.The graph shows the demand curve for U.S. dollars. Draw a new demand curve that shows the effect of an increase in the world demand for U.S. exports. Label it. A change in the expected future exchange rate changes the demand for U.S. dollars and a change in the world demand for U.S. exports changes the demand for U.S. dollars A. today; in the future B. in the future; today C. in the future; in the future D. today; today 160 140- 120- 100- 80- 60- 40+ Exchange rate (yen per U.S. dollar) Do 1.3 1.5 1.6 1.7 1.4 Quantity (trillions of U.S. dollars per day) >>> Draw only the objects specified in the question. 1.8Other things the same, if the U.S. price level falls, then the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate rises. the supply of dollars in the market for foreign-currency exchange increases, so the exchange rate falls. the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate rises. the supply of dollars in the market for foreign-currency exchange decreases, so the exchange rate falls.
- The supply of U.S. dollars on foreign exchange markets is a. derived from the supply of U.S. goods. b. derived from the demand by United States for imported goods and services. c. determined directly by open market operations at the Federal Reserve Bank. d. derived from the demand for U.S. products by foreigners.The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that Japan puts quotas on all U.S. imports. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scenario. PRICE (Yen per dollar) S D QUANTITY OF DOLLARS (Millions per day) If Japan puts quotas on all U.S. Imports, the U.S. dollar 6.4.A decrease in Chinese demand for U.S. dollars over the past year has reduced the market equilibrium exchange rate of the dollar from 10 yuan per dollar to 6.5 yuan per dollar. Other things being equal, which of the following is a likely consequence of this kind of change in the exchange rate of the dollar? a. A higher price of exported U.S. products in Chinese for those paying in yuan, which leads to a deficit in the net export. b. A lower price for imported Chinese products in the U.S. for those paying in dollars, which leads to a surplus in the net export. c. A higher price for imported Chinese products in the U.S. for those paying in dollars, which leads to a deficit in the net export. d. Both (a) and (c)
- 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?Draw the exchange market where dollars trade for British Pounds, with the equilibrium exchange rate at $1.18 and the equilibrium total amount of Pounds traded at 10 million. a> Assume that people in Britain become pessimistic about visiting, buying from, or investing in the United States. How will this market be affected? (i.e., which curve(s) will shift, and in which direction?) b> What will happen to the equilibrium quantity of Pounds traded after the event in part a? What will happen to the equilibrium exchange rate?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.
- U.S. DOLLARS PER POUND 1. Equilibrium rate of exchange Suppose that, initially, the foreign exchange market between the United States and Great Britain is in equilibrium. Suppose that preferences for goods made in Great Britain change in the United States, causing U.S. consumers to purchase fewer goods and services made in Great Britain. Illustrate how this change affects the market for pounds by shifting one or both of the curves on the following graph. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Supply Demand --- Supply K POUNDS Demand This change in the market for pounds causes the U.S. dollar to change in the demand for foreign currency for the United States? O U.S. firms face less pressure to keep prices low. O U.S. inflation is higher due to higher prices on British goods. O U.S. inflation is lower due to lower…a. 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…Would each of the following transactions be includedin U.S. net exports or in U.S. net capital outflow?Indicate whether it would represent an increase or adecrease in that variable.a. An American buys a Sony TV.b. An American buys a share of Sony stock.c. The Sony pension fund buys a bond from theU.S. Treasury.d. A worker at a Sony plant in Japan buys someGeorgia peaches from an American farmer.