Answered: . How is the United States net foreign…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: International Finance

Section: Chapter Questions

Problem 3QP

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Similar questions

What is the foreign exchange market?
A British pound cost 2.00 in U.S. dollars in 2008, but 1.27 in U.S. dollars in 2017. Was the pound weaker or stronger against the dollar? Did the dollar appreciate or depreciate versus the pound?
What is included in the current account balance?
Does a trade surplus mean an overall inflow of financial capital to an economy, or an overall outflow of financial capital? What about a trade deficit?
Imagine that the U.S. economy finds itself in the following situation: a government budget deficit of 100 billion, total domestic savings of 1,500 billion, and total domestic physical capital investment of 1,600 billion. According to the national saving and Investment Identity, what will be the current account balance? What will be the current account balance if Investment rises by 50 billion, while the budget deficit and national savings remain the same?
What is more important, a countrys current account balance or GDP growth? Why?
Does a higher rate of return in a nations economy, all other things being equal, affect the exchange rate of its currency? If so, how?
1. Depreciation and Appreciation of currency. a. Please thoroughly and completely explain how the US dollar might depreciate relative to another currency, and how that would impact U.S. GDP. b.Please thoroughly and completely explain how the US dollar might appreciate relative to another currency, and how that would impact U.S. GDP.
5. How exchange rates can affect a firm’s global sales.?
2. Explain in details by a diagram how the depreciation of the national currency increases inflation in that particular nation Hint: Depreciation leads to an increase in import and export prices in terms of the national currency.
1. Suppose the bank of Canada conducts open market sale, briefly describe how unemployment rate and price level will be affected in the economy, 2. Suppose goods and services in Europe become cheaper compared to goods and services in Canada, what would happen to the Canadian dollar against the Euro - appreciate or depreciate? Explain.

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. How is the United States net foreign wealth affected by a depreciation of the US Dollar?