Question

What would you expect each of the following developments to do to the price of dollars...

What would you expect each of the following developments to do to the price of dollars in euros?
a. European investors lose confidence in American assets and decide to buy fewer American stocks and bonds.
b. The European Union removes its existing tariffs on goods from the United States.
c. Inflation is higher in the United States than in Europe.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A. This will reduce the demand for dollars with respect to euro. As a result, the exchange value of the dollar will come down and the dollar will depreciate.

B. This will increase the import of US goods to the EU. As a result, the demand for the dollar will increase and the exchange value of the dollar will increase and the dollar will appreciate.

C. Higher inflation will result in a fall in the purchasing power of the dollar. Therefore, the exchange value of the dollar will fall and the dollar will depreciate.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can...
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can buy 120 yen per U.S. dollar, a. both the U.S. dollar and the yen have appreciated. b. both the U.S. dollar and the yen have depreciated. c. the U.S. dollar has appreciated and the yen has depreciated. d. the U.S. dollar has depreciated and the yen has appreciated. If the U.S. dollar appreciates in the foreign exchange market, a. American goods will become more...
2. Current, financial, and capital accounts Consider the following table showing hypothetical balance-of-payments data for the...
2. Current, financial, and capital accounts Consider the following table showing hypothetical balance-of-payments data for the United States. Complete the table by selecting the correct value for each missing entry. Balance-of-Payments (Billions of dollars) Current Account U.S. merchandise exports +65 U.S. merchandise imports -68 Merchandise trade balance -3 U.S. service exports +30 U.S. service imports -65    Services balance -35 Goods and services balance -38 Net investment income from abroad -2 Net unilateral transfers -5 Current account balance -45   ...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4 Q2 A variety of investments is available in the marketplace. What types of investors (clienteles) are most appropriate for (a) municipal bonds (b) hi growth, low dividend stocks (c) lower growth, high dividend stocks? Chapter Summary Different economic activities are taxed differently, even if undertaken in the same organizational form. The unequal taxation of returns affects the demand for investment and thereby affects the...
IKEA’s Global Strategy Walk into an IKEA store anywhere in the world, and you would recognize...
IKEA’s Global Strategy Walk into an IKEA store anywhere in the world, and you would recognize it instantly. Global strategy standardization is rampant! The warehouse-type stores all sell the same broad range of affordable home furnishings, kitchens, accessories, and food. Most of the products are instantly recognizable as IKEA merchandise, with their clean yet tasteful lines and functional design. With a heritage from Sweden (IKEA was founded in 1943 as a mail-order company, and the first store opened in Sweden...
IKEA’s Global Strategy Walk into an IKEA store anywhere in the world, and you would recognize...
IKEA’s Global Strategy Walk into an IKEA store anywhere in the world, and you would recognize it instantly. Global strategy standardization is rampant! The warehouse-type stores all sell the same broad range of affordable home furnishings, kitchens, accessories, and food. Most of the products are instantly recognizable as IKEA merchandise, with their clean yet tasteful lines and functional design. With a heritage from Sweden (IKEA was founded in 1943 as a mail-order company, and the first store opened in Sweden...
IKEA’s Global Strategy Walk into an IKEA store anywhere in the world, and you would recognize...
IKEA’s Global Strategy Walk into an IKEA store anywhere in the world, and you would recognize it instantly. Global strategy standardization is rampant! The warehouse-type stores all sell the same broad range of affordable home furnishings, kitchens, accessories, and food. Most of the products are instantly recognizable as IKEA merchandise, with their clean yet tasteful lines and functional design. With a heritage from Sweden (IKEA was founded in 1943 as a mail-order company, and the first store opened in Sweden...
1. What are the requirements for successful price discrimination? Does this type of dry cleaning qualify?...
1. What are the requirements for successful price discrimination? Does this type of dry cleaning qualify? 2. What are other examples of price discrimination? 3. The effectiveness of price discrimination is a different question than whether businesses should be able to discriminate by price. Is this an issue that deserves regulation, or is it best left to the market? Why Women Pay More From dry cleaning to haircuts, women often pay more than men due to gender pricing. Find out...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
What role could the governance of ethics have played if it had been in existence in...
What role could the governance of ethics have played if it had been in existence in the organization? Assess the leadership of Enron from an ethical perspective. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among the top Fortune 500 companies, collapsed in 2001 under a mountain of debt...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT