16- 3) a. The equilibrium is .016 dollars per peso.
b. If the Philippine government set the exchange rate at 50 peso, they would need to sell 20 pesos per month, because supply would be 60 and demand would be 80.
16-7) a) A country would want an overvalued currency if they were a net importer of goods. This would make foreign goods cheaper. The policy would cause harm to that country's exporters.
b) A country would want an undervalued currency in order to facilitate exports. This would cause harm to importers, other countries who want to sell their goods in that market, and to their own citizens traveling abroad.
16-9) a) The exchange rate would be the equilibrium point. In this case, $0.90 dollars per euro.
b) If there is no intervention, the new equilibrium point would be $1.00 per euro, so that will be the new exchange rate.
c) The European central bank would need to created an additional 700 euros of supply. They cannot do this -- they have buy the 300 euros from the U.S., but the 400 dollars they sell is only...
The Canadian government seeks to have a positive balance of payments with the United States. This is, in effect, a wealth transfer. Tracking the balance of payments vs. The exchange rate, we can see the impact of exchange rate shifts on the BOP. The Canadian balance of payments in 2004, when the exchange rate ranged from 1.17 to 1.37, was $29.8 billion. In 2008, when the exchange rate was between
Economic Crisis The revelation of the financial crisis that unfolded in United States in 2008 is considered to be the worst economic crisis since the Great Depression, 1929. The distinctive causative factors that have contributed to the U.S. economic crisis 2008- 2009 are differentiated by aggravated financial control, higher risks in capital investment, the housing bubble phenomena in relation to the brisk credit expansion. The aggregation of these factors in the
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