Greatest impact on the exchange rate

Assignment Help Business Economics

Reference no: EM13984036

What is the probable effect of each of the following on the exchange rate of a country, other things being equal? The quantity of oil imports is greatly decreased, but the value of imported oil is higher due to price increases. The country's inflation rate falls well below that of its trading partners. Rising labor costs of the country's manufacturers lead to a worsening ability to compete in world markets. The government greatly expands its gifts of food and machinery to developing countries. A major boom occurs with rising employment. The central bank raises interest rates sharply. More domestic oil is discovered and developed. Which two of these do you think would have the greatest impact on the exchange rate?

Reference no: EM13984036

Questions Cloud

An important reason that the quantity theory of money : An important reason that the quantity theory of money is less popular today is that:

Pigouvian taxes considered equivalent in implementation : Describe an environment in which permit trading can contribute to economic efficiency. How do permits make such a contribution Why in a traditional model are permits and Pigouvian taxes considered equivalent in implementation? Give a reason that in p..

Short-run effects of eliminating rent control on apartments : Explain the short-run effects of eliminating rent control on apartments. In a competitive industry, with competitive supplies of labor and capital goods which have only normal gains, which factor obtains the "producer surplus"? What is the economic e..

Investment property-inflation has held consistently : 10 years ago Jennifer bought an investment property for $105,000. Over the 10 year period inflation has held consistently at 7% annually. If Jennifer expects a 12%/yr real rate of return, what would she sell the property for today?

Greatest impact on the exchange rate : What is the probable effect of each of the following on the exchange rate of a country, other things being equal? The quantity of oil imports is greatly decreased, but the value of imported oil is higher due to price increases. The central bank raise..

Large country in global economy with fixed exchange rates : Will expansionary monetary policy cause crowding out of investment in a large country in a global economy with flexible exchange rates? Will expansionary monetary policy cause crowding out of investment in a large country in a global economy with fix..

Theory of gains from trade have to say about that criticism : One critic of the North American Free Trade Agreement argued that "it can't be in our interest to sign this deal; Mexico gains too much from it." What does the theory of the gains from trade have to say about that criticism?

Perfectly competitive market with no externalities : What property does market equilibrium have for a perfectly competitive market with no externalities?

Assume the marginal revenue product : Assume the marginal revenue product ( MRP ) for minority workers is given by MRP = 40 − 5N m , where N m is the number of minority workers. The market wage for minorities is $5/hr. Discriminating firms devalue the contributions of minorities at a rat..

User Account

All Pages