Final exam questions | Economics homework help

 Please answer all the questions by tonight please. I’ve attached the textbook which will be really helpful in locating answers.

International Economics (EC O221/1000)

Do all questions

  1. a. If the exchange rate changes from $1.75 to £1, to $1.79 to £1, What does this means for the dollar? For the pound? What if the exchange rate changes from $1.80 = £1 to $1.75 = £1?

     b. Suppose $1.70 = £1 in New York and $1.65 = £1 in London. How can foreign exchange arbitragers profit from this exchange rate? Explain how foreign exchange arbitrage results in the same dollar/pound exchange rate in New York and London.

2. Assume that the United States exports 2,000 computers costing $5,000 each to the UK, and imports 200 UK autos at a price of £12,000 each. Assume that the dollar/pound exchange rate is $1.75 per pound.

Calculate in dollar terms:

a. The US export receipt

b.US import payments

c. Trade balance

d. Suppose the dollar’s exchange value depreciates by 10%. Assuming that the price elasticity of demand for exports for U S equals 0.5 and price elasticity of demand for US imports equals 0.2, does the dollar depreciation improve or worsen the US trade balance? Why?

e. Now assume that the price elasticity of demand for US exports equals 2 and price elasticity of demand for US imports equals 1. Does this change the outcome? Why?

3. Suppose ABC Inc., a U.S. auto manufacturer, obtains all of its auto components in the United States and that its costs are denominated in dollars. Assume that the dollar’s exchange value appreciates by 50% against the Mexican peso. What impact does the dollar appreciation have on the firm’s international competitiveness? What about a dollar depreciation?

4. What factors underlie a nation’s decision to adopt floating exchange rates or fixed exchange rates? Page 460

5. Complete this hypothetical case of US balance of payments for 1950 (Billion of dollars)

Goods export  $20

Services Export $5

Income from foreign investment $11

Unilateral transfer receipts $2

Services imports -$6

Payments to foreign investments -$8

Unilateral transfer payments -$7

Goods import -$23

U.S owned assets abroad -$10

Foreign-owned assets in the U.S. $13

Merchandise trade balance ?

Goods and service balance ?

Current account balance ?

Capital and financial account balance ?

Statistical discrepancies ?

6. In comparing the US dollar to the Euro, explain how changes in US price levels, productivity, preference, and US trade barriers can affect the dollar’s exchange rate in the long run.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more