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- Determine which account of the Balance-of-Payments is affected the following transaction: National Commercial Bank, a local company, pays USS1 million in dividends to foreign shareholders. Select one: O a. Current Account - Exports O b. Current Account - Imports O c. Capital Account - Portfolio Investment O d. Capital Account - Foreign Direct Investment O e. Current Account - TransfersDetermine which account of the Balance-of-Payments is affected the following transaction: National Commercial Bank, a local company, pays US$1 million in dividends to foreign shareholders. Select one: a. Current Account Transfers O b. Current Account Imports O c. Capital Account Portfolio Investment d. Capital Account Foreign Direct Investment O e. Current Account - ExportsDetermine which account of the Balance-of-Payments is affected the following transaction: A local company exports rum valued at USS 1 million to the United States. Payment is made to the local company's account at Citibank's local branch. Select one: O a. Capital Account - Capital Transfers O b. Current Account - Imports O. Capital Account - Foreign Direct Investment O d. Capital Account - Portfolio Investment O e. Current Account - Exports
- Determine which account of the Balance-of-Payments is affected the following transaction: A local resident purchases a retirement condo in Florida for US$10 million. Select one: O a. Current Account - Transfers O b. Current Account - Imports O c. Capital Account - Portfolio Investment O d. Capital Account - Foreign Direct Investment Oe. Current Account - Exports2. Determining long-term exchange rates Consider two countries, the United States and Japan, that trade with each other. Suppose that the productivity growth in the United States accelerates, but it remains the same in Japan. The following graph shows the supply and demand for the Japanese yen in the United States before the change in productivity. The vertical axis is the exchange rate of the yen in terms of the dollar, and the horizontal axis is the quantity of yen. Show how the change in productivity affects the equilibrium exchange rate by shifting one or both of the curves on the graph. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Supply Demand Supply Demand EXCHANGE RATE (Dollars per yer7. Previously metals are used as trading purposes. Both gold and silver are used as international means of payment and the exchange rates among currencies are determined by either their gold or silver contents. Suppose that the dollar was pegged to gold at S20 per ounce, the Japanese yen is pegged to gold at 120,000 yen per ounce and to silver at 8,000 yen per ounce of silver, and the Canadian dollar is pegged to silver at S$5 per ounce of silver. What would the exchange rate between the U.S. dollar and Canadian dollar be under this system?
- 2. Determining long-term exchange rates Consider two countries, the United States and Japan, that trade with each other. Suppose that the productivity growth in the United States accelerates, but it remains the same in Japan. The following graph shows the supply and demand for the Japanese yen in the United States before the change in productivity. The vertical axis is the exchange rate of the yen in terms of the doliar, and the horizontal axis is the quantity of yen. Show how the change in productivity affects the equilibrium exchange rate by shifting one or both of the curves on the graph Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther EXCHANGE RATE (Dolars per yen Supply Demand QUANTITY (Millions of yer) As a result of the change in productivity, the U.S. dollar appreciates depreciates Demand Supply2. Determining long-term exchange rates Consider two countries, the United States and Japan, that trade with each other. Suppose that the productivity growth in the United States accelerates, but it remains the same in Japan. The following graph shows the supply and demand for the Japanese yen in the United States before the change in productivity. The vertical axis is the exchange rate of the yen in terms of the dollar, and the horizontal axis is the quantity of yen Show how the change in productivity affects the equilibrium exchange rate by shifting one or both of the curves on the graph Note: Select and drag one or both of the curves to the desired position. Curves will snap Into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther EXCHANGE RATE (Dollars per yeni Demand QUANTITY (Millions of yen) As a result of the change in productivity, the U.S. doilar appreciates depreciates Demand 161 SupplyConsider the balance-of-payments accounting information for Lalaland in 2010 as shown in the table below. All values are in billions of dollars and any variables not provided below have a value of zero. Exports 560 Imports Net foreign-investment income Capital outflows Capital inflows 350 - 50 255 95 What is the current account balance for Lalaland in 2010? ..... O A. $160 billion O B. $260 billion OC. - $260 billion O D. - $160 billion O E. $0
- Suppose a basket of goods costs $50 in the U.S. and €20 in France. What exchange rate, in dollars per euro, would be consistent with purchasing power parity? O $1.50 O $0.40 O $2.50 O $226. Foreign Exchange Market 1 A E[Euro return] Rates of Return (in dollar terms) An increase in the money supply would shift the Rs1 curve to the and the dollar would O A. Left: depreciate O B. Right: depreciate O C. Right: appreciate O D. Left: appreciate 3. Given the following data: Et = ¥125 = $1.00 Et+1 = ¥105 = $1.00 Rus = 10% Rjapan = 12% If a $1,000 is invested in the US, the future value is repatriated back to dollars, the future value is $ If the the $1.000 is invested in Japan and _respectively. O A. $1,000: $1,100 O B. $1,100: $1,000 O C. $1,100: $1,120 O D. $1,100: $1,333 21. Which of the following replicates a characteristic of horizontal FDI. O A. Behind the large increases in FDI inflows to develping countries O B. Mainly driven by the production cost differencs between countries C. Production cost differences in FDI to developing countries O D. The affiliate replicates the production process elsewhere in the world 30. STRAWBERRIES CHAMPAGNE aLc = 4 hours per pound a'Lc…41 Suppose the Euro substantially depreciates against the Jopanese yen. The change in the exchange rate sut of Select one: O a will tend to weaken the competitive position of import-competing European car makers. O b. None of them. O c. will tend to strengthen the competitive position of import-competing European car makers, O d will tend to strengthen the competitive position of Japanese cor makers at the expense of European car makers.