d) King's Landing (KL) generally runs a trade surplus. Do you think this is mainlyrelated to: (i) high foreign demand for goods made in KL; (ii) low demand forforeign goods in KL; (iii) a high saving rate relative to investment in KL; or (iv)structural barriers against imports into KL? Explain your answer. [25 marks]

(i) High foreign demand for goods made in KL:Imagine KL produces dragonscale armor, which is highly…

Answered: d) King's Landing (KL) generally runs a…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 1PA

See similar textbooks

Similar questions

Assume that you have been hired by an International Organization to be consulted on various issues that the country Motherland faces. For this exercise, assume that Motherland is a small agricultural economy. Assume that the biggest trading partner of Motherland is the United States. Unlike Motherland, the United States is a large industrial country. What type of trade model can best explain the trade between Motherland and the United States? Explain your answer in no more than 200 words. (4 marks)
b) Suppose that the current spot exchange rate of U.S. dollars for Australian dollars, Suss/As is 0.757 (i.e. $0.757 US dollar can be received for 1 Australian dollar). The price of Australian-produced goods increases by 5 percent (i.e. inflation in Australia, IPA, is 5 percent), and the U.S. price index increases by 3 percent (i.e. inflation in the United States, IPus, is 3 percent). Calculate the new spot exchange rate of U.S. dollars for Australian dollars that should result from the differences in inflation rates.
45) Assume that Outland specialises in producing skateboards and Inland specialises in producing surfboards. After trade, Outland exports 500 skateboards and imports 100 surfboards. The rate of exchange A) is 1/5:1 skateboards to surfboards. B) is 5:1 skateboards to surfboards. C) is 1:5 skateboards to surfboards. D) cannot be determined from this information
PRICE (Peso per dollar) 9. Study Questions and Problems #9 The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that inflation rates increase in the United States. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scenario. ? QUANTITY OF DOLLARS (Millions per day) D If inflation rates increase in the United States, the U.S. dollar ŏ S D S
Assume that the total value of investment transactions between the United States and Mexico is minimal. Also, assume that the total dollar value of trade transactions between these two countries is very large. Now assume that Mexico's inflation has suddenly increased, and Mexican interest rates have suddenly increased. a) Please draw a graph to show how the equilibrium value of Mexican Pesos will change. b) What's more important for Mexican Pesos given the circumstances, change in interest rates, or change in inflation in Mexico?
14- the difference between the current account and total trade (merchandise trade and service trade) is equal to Please select one; a) foreign direct investment plus portfolio investment plus cross-border loans and bank deposits nwww ww b) income payments plus unilateral transfers c) the change in international reserves d) international reserves minus statistical discrepancy e) foreign direct investment plus portfolio investment
9) Which of the following can lead to an increase in the demand for Japanese yen compared to the U.S. dollar? a) an increase in the relative price of Japanese-made goods b) an increase in the interest rate in Japan relative to the U.S. rate c) a decrease in the amount of yen bought by the U.S. government d) a decrease in the demand for goods made in Japan 10) Which of the following statements is NOT true? a) If a country's exports exceed its imports, then there is a trade surplus. b) If the balance of trade is positive, then the balance of payments is also positive. c) If a country's balance of trade is positive, then its exports exceed its imports. d) A country's balance of trade includes trade in both goods and services.
PRICE (Yen per dollar) 9. Study Questions and Problems #9 The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market. Suppose that real interest rates in the United States rise. On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scenario. D QUANTITY OF DOLLARS (Millions per day) S D If real interest rates in the United States rise, the U.S. dollar S ?
Question 5 [Consider a prosperous open economy such as Singapore. If Singapore’s saving rate (gross domestic saving as a % of GDP) is 25%, while its investment rate (domestic investment as a % of GDP) is 20%, the economy will experience a trade surplus, meaning that receipts from exports exceed expenditure on imports. Your answer: [True/False/Uncertain and explain why]
7-) Question: Policies that tend to cause Please select one or more option: www.WA a) decrease investment / a trade surplus b) increase investment / a trade surplus c) increase investment / a trade deficit d) decrease investment / a trade deficit e) increase investment / no effect on the trade balance 8-) Question: A real exchange rate . could result from an . in ...... .... ........ .... Please select one or more: a) depreciation / increase / taxes b) appreciation / increase / taxes c) appreciation / increase / government spending d) depreciation/ decrease / government spending e) appreciation / decrease / the world interest rate
)Listen Foreign direct investment is the term used to describe purchases of firms in another country that involve A) internationally traded goods across countries B) the exchange rate market C) taking a management responsibility D) using another currency
Q1-9 If, because of Japan's high saving rate (in excess of domestic investment spending) Japan invests overseas, then this investment can cause ______ of the Japanese yen and thus a consequent trade _____ for Japan. a. a depreciation / deficit b. a depreciation / surplus c. an appreciation / deficit d. an appreciation / surplus

SEE MORE QUESTIONS

Recommended textbooks for you

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Survey Of Economics

Economics

ISBN:

9781337111522

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Survey Of Economics

Economics

ISBN:

9781337111522

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

MACROECONOMICS FOR TODAY

Economics

ISBN:

9781337613057

Author:

Tucker

Publisher:

CENGAGE L

SEE MORE TEXTBOOKS