Answered: the exchange rate can't be used as a…

Business

Economics

the exchange rate can't be used as a monetary policy guide because?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 1SCQ: If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account...

See similar textbooks

Related questions

Q: Consider an economy with two goods, consumption c and leisure 1, and a representative consumer. The…

A: Given information Considering an economy with two goods: Consumption, c Leisure, l A consumer's…

Q: Please answer whether a statement is true or false and give a 1-2 sentence explanation of why this…

A: Risk in economics is the measure of uncertainty and potential loss connected to a specific choice or…

Q: Use the table below to calculate the MPC, MPS, government spending multiplier, and tax multiplier.…

A: Introduction MPC is the percentage of a family's income extra income that's consumed. The percentage…

Q: Refer to the figure below. Calculate the value of the price elasticity of supply between g and h and…

A: Price Elasticity of Supply measures the percentage change in quantity supplied of a good or service…

Q: Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to…

A: Present Worth (PW) is today’s value of money you expect from future income and is computed as the…

Q: Part a: Find the Nash equilibrium

A: Nash Equilibrium refers to the strategy which is best response to the given strategy of the rival…

Q: State of development in Kenya. Explain

A: Development is a process of good change wherein people, communities, and nations gradually better…

Q: The demand for monorail service in a city in 2005 can be approximated by q-4,500p+ 44,600 rides per…

A: Total revenue: The demand function reflects the inverse relationship with the price of any commodity…

Q: Let's say when gasoline prices increase by 50%, quantity demanded decreases by 10%. Calculate the…

A: The elasticity of demand measures the responsiveness of change in quantity demand to change in…

Q: Suppose a market has a Herfindahl index of 0.1. Should we expect this market to be fiercely…

A: To determine the level of market rivalry, economists frequently use the Herfindahl index, which is a…

Q: Music Chairs 5 players are playing a new game of musical chairs with the following rules: There are…

A: Given that; The musical chairs game being played by 5 players are as follows: One red chair and…

Q: Document important developments within your life through developmental theories. This is an…

A: Key concept- Self-efficacy refers to an individual's belief in their ability to successful…

Q: If business firms do not have to generate revenues sufficient to cover their sunk costs, does anyone…

A: Sunk cost: Sunk costs are those costs which already been incurred and cannot be recovered. Hence,…

Q: True or False Explain why, Use basic AD/ AS model Suppose that there is a decline in velocity…

A: The AD/AS model is a macroeconomic model that explains the relationship between aggregate demand…

Q: the answer provided is in order, however due to its overly spread, i would want a different version…

A: Governments provide cash help known as unemployment benefits to people who have lost their jobs and…

Q: A monopolist serves a market with five potential buyers, each of whom would buy at most one piece of…

A: Quantity 1 2 3 4 5 VC P 130 110 90 70 50 TR MR MC 50 55 60…

Q: The Poster Bed Company believes that its industry can best be classified as monopolistically…

A: Total revenue and total costs: Total revenue is the total value of the commodities produced and sold…

Q: Suppose that you have five consumption choices: good ₁ 5. An indifference surface is the set of…

A: Consumer maximizes their utility by spending their income on different goods and services at a point…

Q: 4) Price Level Pa P4; Q4. OP2; Q4. LRAS P4; Q2. OP5; Q3. OP3; Q3. SRAS, None of the above SRAS 0₁ 0₂…

A: In economics, inflation is the term use for continuously rise in prices of all goods and services in…

Q: Lilliput is a country that has closed borders and does not import or export any goods or services;…

A: Budget balance refers to the difference between revenue and expenditure of government. The budget is…

Q: Brenda's Family Photos is a photographic portrait business in a perfectly competitive market in…

A: The goal of a firm can vary depending on the specific circumstances and objectives of the company.…

Q: Suppose that in a small town, the market for cement had five companies with market shares 0.3, 0.2,…

A: Herfindahl–Hirschman index or HHI index measures the market concentration by summing the square of…

Q: A new restaurant – Uovo – has just opened in West L.A. It is serving the upscale market, with truly…

A: Given information; A restaurant faces the following demand function: Q = 600 - 4P Where Q is the…

Q: 5. “ As a manger of a firm, you are concerned about a potential increase in interest rates, which…

A: Monetary policy refers to the actions taken by a central bank or monetary authority to manage and…

Q: 5. Costs in the short run versus in the long run Scooter's Scooters is a large American manufacturer…

A: Average total cost is the per unit total cost of production. It is determined by dividing the total…

Q: Decompose the change into income and substitution effects

A: The price of pillows has increased from $35 to $40 per pillow, while the price of sodas remains…

Q: Consider the market for electricity. Suppose that a power plant dumps byproducts into a nearby…

A: External cost is the spillover negative effect of an economic activity on society which is not…

Q: Explain the Bertrand paradox. How does it inform our explanations of market power in industries with…

A: Bertrand Competition refers to the competition where two firms compete on the basis of the price. It…

Q: 1.The CPI in the base year is 2.The CPI in 2018 is 3.you learn next year (2019) that the CPI is…

A: Consumer price index (CPI) is a measure of average variation in prices of final commodities over a…

Q: Figure Z 430 220 100 40 16 Price 2 n Supply 20 Quantity Refer to Figure Z. When is this supply curve…

A: Elasticity measures the percentage change in quantity due to percentage change in price. The supply…

Q: which of the following production functions is an increasing, decreasing or consistent return to…

A: Production function shows the relationship between the inputs used and output produced. Constant…

Q: Carlos spends income on books and coffee. Coffee costs $4, books cost $10, and at his current…

A: Utility is maximized where the marginal utility per dollar of one good is equal to the marginal…

Q: 4.1) Using the substitution method, solve the following simultaneous equation:

A: The method of substitution involves finding the value of x in terms of y from the first equation…

Q: 5. Design and solve a one-period game with two players who each have two possible actions. Assume…

A: Game theory uses the term "Nash equilibrium" to refer to a situation when all players have settled…

Q: Part 1: 1. Suppose the monetary base is $80,000, the reserve requirement is 0.20, the…

A: Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: When fighting a recessionary gap, central banks will amount of loans being provided by commercial…

A: A recessionary gap, is also known as contractionary gap. It happens when a country's real GDP is…

Q: 4. Cost-benefit analysis A local college is deciding whether to conduct a campus beautification…

A: A good is nonrival when its availability does not decrease by the other people’s consumption. A good…

Q: Suppose an industry has three identical firms competing on quantities with demand P = 100 ― (2)Q and…

A: Businesses with identical cost structures, production technology, and other important…

Q: Draw the correctly labeled graph that shows the impact of decreased money supply and its impact on…

A: The entire amount of money that is in circulation in the economy at any particular time is referred…

Q: Describe Malthus’ pessimistic model of population. What empirical facts about population in the…

A: ***Since the student has posted multiple questions, hence, the expert is required to solve only the…

Q: The figure below shows cost and revenue. $(thousands) 400 300 200 100 5 10 C(q) 15 R(q) q…

A: Total revenue and total costs: Total revenue is the total value of the commodities produced and sold…

Q: A firm has the production function f(x,y)=x0.90.8. This firm has O constant returns to scale.…

A: The production function is:- f(x,y) = (x^0.9) * (y^0.8)

Q: Question 3 NOTE: Economists distinguish between two types of costs: Accounting cost and Economic…

A: Accounting costs are the actual charges that a business incurs in producing and selling its products…

Q: 30. Consider a Solow Model where y = (Y/L) and k = (K/L) and y = k.5. L stands for the number of…

A: The Solow model explains that economic growth can occur through capital accumulation, which is the…

Q: Figure: External Benefits Price B D E GH M O private cost social value The distance between point E…

A: Externalities are a fundamental concept in environmental economics. In economic terminology, an…

Q: You have collected a sub-sample from the Current Population Survey for the western region of the…

A: A regression refers to the statistical technique that tells a dependent variable to one or more…

Q: Suppose there is an inverse demand curve P = Y-bQ, marginal cost is c. Part a: Find the profit…

A: The profit is maximized where the marginal revenue is equal to the marginal cost. Marginal cost is…

Q: 14. Determine the periodic payment for the following deferred annuity. The annuity is an ordinary…

A: Formula: Single payment series future worth: F=P1+in Capital recovery factor: A/P,i,n=i1+in1+in-1

Q: Three firms produce identical products and compete in a market where the inverse demand function is…

A: (a) To find the Nash equilibrium, we need to find the best response function for each firm. Let qi…

Q: Determine the FW of the following engineering project when the MARR is 15% per year. Is the project…

A: Future Worth: The future worth is considered as the value of an asset at a particular date with the…

Question

the exchange rate can't be used as a monetary policy guide because?

a. the data on exchange rate is not avaliable

b. the exchange rate can't be measured

c. the exhcange rate may change due to the foreign policy

d. the exchange rate is not accurate

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account balance?
How does interest rate affect exchange rate?
According to Mundell optimum currency area theory try to explain if EU is an optimum currency area or not?
What's the impact on the exchange rate between the US and France if both France and the US increase productivity?
In some cases, governments will intervene in the currency markets to incresae or decrease the value of the country's currency. Which of the following is an example of direct intervention in foreign exchange markets? A. The European Central Bank lowers interest rates to increase the value of the euro. B. The Japanese government purchasing JPY with USD to increase the value of the Japanese yen. C. China imposing barriers on imports from Europe. D. The U.S. lowers interest rates to decrease the value of the U.S. dollar.
What happens to the balance of trade if the nominal exchange rate depreci-ates?
What is an exchange rate and why would a government want to maintain a fixed exchange rate?
If a country has a floating exchange rate, then will a rise in the exchange rate be bad or good for importers?
In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the demand for dollars?
What is the structure of the exchange rate mechanism in US and Thailand? Please explain. Please answer I will rate
If there is a decrease in the desire of foreigners to purchase goods and services from the United States and a lower desire to invest in U.S. banks and businesses, then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would depreciate. B. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the U.S. dollar would depreciate. D. The equilibrium quantity of foreign currency would increase and the U.S. dollar would appreciate.
What do you mean by balance of trade? Be brief while writing answer