Question 1

Explain and show graphically the effect of a decrease in U.S.budget deficits that decrease U.S.interest rates on the demand and supply of U.S.dollars for euros.

Accepted Answer

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Question 2

What are the three main sets of factors that cause the supply and demand curves in the foreign exchange market to shift?

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Question 3

If the exchange rate between the Mexican peso and the U.S.dollar expressed in terms of pesos per dollar is 13.5 pesos = 1 dollar,what is the exchange rate when expresses in terms of dollars per peso?

Accepted Answer

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Question 4

If American demand for purchases of British goods has decreased,how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically.

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Question 5

Explain and show graphically how an increase in incomes in the United States will affect equilibrium in the foreign exchange market?

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Question 6

If American demand for purchases of Mexican goods has increased,how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically.

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Quiz 19: Comparative Advantage, international Trade, and Exchange Rates