Reference no: EM133215211
Equilibrium changes in the foreign exchange market
The following questions focus on the exchange rate between the Russian ruble and the South Korean won. Assume the exchange rate is flexible. The exchange rate is defined as the number of rubles you must pay for one won.
Suppose an economic downturn in South Korea causes South Korean incomes to decrease, while Russian incomes remain unchanged.
Shift the appropriate curve or curves on the following graph to illustrate how this affects the market for South Korean won if all other things remain equal.
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.
Demand for WonSupply of WonRUBLES PRICE OF WONQUANTITY OF WONDemand for Won Supply of Won
The decrease in South Korean incomes causes the South Korean won to relative to the Russian ruble and causes the Russian ruble to relative to the South Korean won.
Suppose the price level in Russia rises by 10%, while the price level in South Korea remains the same. That is, the inflation rate in Russia is higher than in South Korea.
Drag the appropriate curve or curves on the following graph to illustrate how this affects the market for South Korean won.
Demand for WonSupply of WonRUBLES PRICE OF WONQUANTITY OF WONDemand for Won Supply of Won
Suppose the real interest rates in Russia and South Korea are initially the same. Then the real interest rate in Russia falls, while the real interest rate in South Korea remains the same. This will cause the supply of won to and the demand for won to
Describe the benefits and drawbacks of global sourcing
: Describe the benefits and drawbacks of global sourcing, while providing real-life examples of both since the advent of Covid-19.
|
Participation in the loanable funds market
: Regarding your participation in the loanable funds market. Review the "EYE on Your Life" caption titled, Your Participation in the Loanable Funds Market, within
|
Reliance on oil imports from the middle east and venezuela
: NAFTA reduced U.S. reliance on oil imports from the Middle East and Venezuela. It was especially important when the United States banned oil imports from Iran.
|
Describe the limitations of fiscal and monetary policies
: Describe the limitations of fiscal and monetary policies in achieving their intended goals. How might they not work as intended? Increasing/decreasing taxes, in
|
Equilibrium changes in the foreign exchange market
: The following questions focus on the exchange rate between the Russian ruble and the South Korean won. Assume the exchange rate is flexible. The exchange rate i
|
Federal reserve making tax
: Assignment: suggestions for further resources, questions of clarification, or providing context and insight. Avoid simple posts of agreement; if you agree, expl
|
Inflation and ship in the aggregated supply curve
: In relation with the inflationary tendency in Australia during this period, Do you think is necessary increase more the cash rate, to get the economy back in co
|
Relationship between the us dollar and the euro
: If you haven't already made travel plans for this year, you might want to consider heading to Europe. The U.S. dollar recently reached parity with the euro, som
|
What is the amount of excess demand
: What is the amount of excess demand? (Assume that the number between 600 and 700 is 680 where the vertical line intersects the horizontal axis). (Show your math
|