Effects of increase in european money supply on dollar, International Economics

Assignment Help:

Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate.

Answer:  The major points are: A raise in the European money supply will reduce the interest rate on the euro and therefore causes the euro to depreciate against the dollar.  The U.S. money supply and money demand aren't going to be affected and therefore the interest rate in the U.S. will stay the same.

 


Related Discussions:- Effects of increase in european money supply on dollar

Capability, In the International Medical Center, clients are patients who ...

In the International Medical Center, clients are patients who use the services provided by the hospital, such as the health program, preventive services, and surgery. Other custom

Unrealized gains from trade, Q. Explain why large interest rate differences...

Q. Explain why large interest rate differences would be strong evidence of unrealized gains from trade. Answer: The difference between offshore and onshore interest rates on

International trade, International business involves the management of inte...

International business involves the management of international risk. To minimize risks commercial parties utilize independent guarantees and standby letters of credit. (a)  Dis

Treflers case of missing trade, Q. The Heckscher-Ohlin model is famous for ...

Q. The Heckscher-Ohlin model is famous for being elegant and mathematically sophisticated, yet failing to define reality. One manifestation of this fact is Trefler's Case of Missi

Terms of trade, Difference between net barter terms of trade and gross bart...

Difference between net barter terms of trade and gross barter terms of trade

Is europe an optimum currency area, Q. Is Europe an optimum currency ...

Q. Is Europe an optimum currency area? Answer: Yes the area's economy is strongly integrated with its own: most EU members export as of 10 to 20 percent of their output

Economics, describe the U.S role in the world economy

describe the U.S role in the world economy

Economic investigations report, The latest economic investigations report t...

The latest economic investigations report that the recent earthquake, tsunami and nuclear disaster have led to an economic recession in Japan. This recession may reduce the demand

INTERNATIONAL TREAD, WHATE IS THE PROPERTY OF OFFER CURVE OF A COUNTRY

WHATE IS THE PROPERTY OF OFFER CURVE OF A COUNTRY

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd