Participation Homework # 6 ($25,000): Due Wednesday, April 26th by
11.45pm.
Directions: All homework must be typed. Please type your answers in a new
file.
Include your full name and Net ID (Uni of Arizona email address) at the start
of your file.
Homework that is handwritten will receive a zero.
Submission: Homework must be submitted via D2L by the date/time above.
Do NOT submit your homework directly to me.
NO late homework is accepted. Please submit one file only.
Homework should be uploaded in 1 file: as a WORD DOC/DOCX
Reminder: You may work in groups but you must write up you own unique
responses.
1. The U.S. dollar price of a Swedish krona changes from $0.1572 to $0.1730.
A) Has the dollar depreciated or appreciated against the krona? ($500)
B) Has the krona appreciated or depreciated against the dollar? ($500)
2. Suppose you want to import a pair of authentic Aussie Ugg Boots. The retail price in
Australia is $299 AUD. If the current exchange rate is 0.80 USD = 1 AUD, how many USD
do you need to buy the boots? ($1,000)
3. Suppose that the Australian dollar depreciates against the USD such that 0.50 USD = 1
AUD. Assuming a pair of Ugg Boats still retails for $299 AUD, how many USD do you now
need to buy the boots? Have the boots become cheaper or more expensive for the American
customer? By how much? ($1,000)
4. Assume the initial $/£ exchange rate is equal to 1.50. That is, 1.5 USD=1 £.
A) What happens to the exchange rate when the dollar appreciates relative to the pound?
($500) B) What factors cause an appreciation? ($1,000)
C) Draw the appreciation in Part B) on a supply & demand diagram. Assume the initial $/£
exchange rate is equal to 1.50 and that after the appreciation of the USD the new $/£
exchange rate is equal to 1.20. ($1,000)
D) Assume the Fed Reserve does not want the dollar to appreciate against the pound. What
actions could it take? Illustrate this on a separate graph ($1,000)
5. Consider the foreign exchange market for British pounds from a U.S. perspective.
Assume the initial $/£ exchange rate is equal to 1.50.
A) Assume the American economy experiences a boom and its citizens buy more UK
imports. The $/£ rises to 2.15. Has the USD appreciated or depreciated? Why would the
USD appreciate/depreciate? ($500)
B) Show your answer to Part A on a graph. ($1,000)
C) If the Fed Reserve did not want the dollar price of the pound to change, what actions
could it take? Illustrate this on a graph which includes details from Part B. ($1,000) 6. How does China’s trade surplus with America put pressure on its currency (the Yuan or
RMB) to rise. How does its central bank prevent the Yuan (RMB) from appreciating?
Describe the actions and illustrate on a graph. The y-axis should be labelled $ per Yuan.
Assume the supply curve of Yuan is perfectly inelastic (vertical) ($2,000)
7. The following questions come from the article “What it means if Trump names China a
currency manipulator?” You can find the article in the homework folder on D2L.
A) How did currency manipulation in the mid 2000s allow China to maintain a large
bilateral trade surplus with America? Answer in 2 sentences. ($1,000)
B) Why did the Yuan (RMB) drop in value (depreciate) against the USD in 2016? ($1,000)
C) What actions did the Chinese authorities take to prevent the Yuan from further
depreciation in 2016? ($1,000)
D) Why does the author find it ironic that President Trump wants to label China a
currency manipulator in 2017? ($1,000) 8. Why did attempts to return to the gold standard during the interwar period fail?
($2,000) You should use your class notes & watch the following clip:
https://drive.google.com/file/d/0ByZgnIP0zJ4ORHZ1MjdSb2J6WVU/view?usp=sharing
9. Watch the following clip about the Eurozone debt crisis.
https://drive.google.com/file/d/0ByZgnIP0zJ4Ob1JZSG5PcEZ3Vms/view?usp=sharing
What is meant by the term ‘imperfect’ union? How did this lead to moral hazard &
contribute to the Eurozone debt crisis? ($3,000)
10. Certain types of countries have preferences for fixed/pegged or floating exchange rate
systems. Write 2-3 sentences on the exchange rate preference for each of the following 5
factors ($1,000 per factor = $5,000).
A) Country size
B) Openness
C) Trade pattern:
D) Inflation rate
E) Money supply

• 1493793799-What it means if Trump names China a currency manipulator.pdf

SuperTutor

(15)

Status NEW Posted 03 May 2017 06:05 AM My Price 13.00

-----------

Attachments

file 1493793801-Solutions file.docx preview (56 words )

S-----------olu-----------tio-----------ns -----------fil-----------e -----------Hel-----------lo -----------Sir-----------/Ma-----------dam----------- T-----------han-----------k y-----------ou -----------for----------- yo-----------ur -----------int-----------ere-----------st -----------and----------- bu-----------yin-----------g m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l b-----------e q-----------uic-----------kly----------- on-----------lin-----------e a-----------nd -----------giv-----------e y-----------ou -----------exa-----------ct -----------fil-----------e a-----------nd -----------the----------- sa-----------me -----------fil-----------e i-----------s a-----------lso----------- se-----------nt -----------to -----------you-----------r e-----------mai-----------l t-----------hat----------- is----------- re-----------gis-----------ter-----------ed -----------on�-----------�th-----------is -----------web-----------sit-----------e. ----------- H-----------YPE-----------RLI-----------NK -----------&qu-----------ot;-----------htt-----------p:/-----------/wo-----------rkb-----------ank-----------247-----------.co-----------m/&-----------quo-----------t; -----------\t -----------&qu-----------ot;-----------_bl-----------ank-----------&qu-----------ot;----------- -----------Tha-----------nk -----------you----------- -----------

Not Rated(0)

• Buy Answer