Question

Sketch a graph that demonstrates the demand and supply for the South Korean won against the...

Sketch a graph that demonstrates the demand and supply for the South Korean won against the US dollar. *Label the initial equilibrium exchange rate and quantity of won.

*On the graph, clearly, demonstrate (shift the correct curve(s)) what happens to the exchange rate when strong growth is expected by firms in South Korea. *Explain why you have drawn the change as you have.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

When South Korea expects strong growth, its aggregate demand rises faster than aggregate supply, so import demand increases. As a result, South Korea's demand for US dollar rises (to be able to ay for higher imports from US) and South Korea's demand of Won falls. The demand curve for Won shifts leftward, decreasing exchange rate and quantity of Won.

In following graph, exchange rate (e) and quantity of Won (Q) are measured vertically and horizontally respectively. D0 and S0 are initial demand & supply curves for Won, intersecting at point A with initial exchange rate e0 & quantity of Won Q0. As demand for Won falls, D0 shifts left to D1, intersecting S0 at point B with lower exchange rate e1 (i.e. Won depreciates) and lower quantity of Won Q1.

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
2. Graph B: Utilize a market model to draw the demand and supply for loanable fund...
2. Graph B: Utilize a market model to draw the demand and supply for loanable fund in equilibrium. Label the demand curve D1 and the supply curve S1. Label the initial interest rate as r1 and quantity of loanable funds as Q1. Shift the correct curve to demonstrate what happens in this market when there is strong economic growth. Be sure to label the new equilibrium interest rate and quantity of loanable funds. Briefly describe what has happened in this...
Utilize a market model to draw the demand and supply for loanable fund in equilibrium. Label...
Utilize a market model to draw the demand and supply for loanable fund in equilibrium. Label the demand curve D1 and the supply curve S1. Label the initial interest rate as r1 and quantity of loanable funds as Q1. Shift the correct curve to demonstrate what happens in this market when there is strong economic growth. Be sure to label the new equilibrium interest rate and quantity of loanable funds. Briefly describe what has happened in this market.
2. Consider two countries: Japan and South Korea. In 1996 Japan experienced relatively slow output growth...
2. Consider two countries: Japan and South Korea. In 1996 Japan experienced relatively slow output growth (1%), whereas South Korea had relatively robust output growth (6%). Suppose the Bank of Japan allowed the money supply to grow by 2% each year, while the Bank of Korea chose to maintain relatively high money growth of 15% per year. For the following questions, use the simple monetary model (where L is constant). You will find it easiest to treat South Korea as...
Create a supply and demand graph in Excel that demonstrates the relationship between the amount buyers...
Create a supply and demand graph in Excel that demonstrates the relationship between the amount buyers are willing to purchase and the quantity available. You may select your own data points, but you must discuss the relationship between supply and demand within the economy, as well as discuss the concept of market equilibrium. Please attach your graphs along with your discussion in your response. Provide an explanation for the value graphing supply and demand and analyzing the data can have...
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What...
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels? Show graphically the shift. Clearly label everything, properly show the shift, the original equilibrium and the new equilibrium. To upload your answer, you can either draw the graph by hand, take a picture then upload image, or plot the graph using Word or...
Plz answer 1.What are some strategies a multinational firm could undertake to lower its cost of...
Plz answer 1.What are some strategies a multinational firm could undertake to lower its cost of capital? Mention at least two. Explain why these strategies would lower the cost of capital. 2.You want to use the dividend discount model with a constant growth rate to value a security. What is the most difficult input to estimate correctly? Why? Does getting this input wrong give significant consequences? Explain. 3.You are considering a project in South Korea. The cash flows are in...
On a graph of a demand curve, total consumer surplus equals:     A-the demand curve. B-the...
On a graph of a demand curve, total consumer surplus equals:     A-the demand curve. B-the area above the demand curve and beneath the market price. C-the market price. D-the area beneath the demand curve and above the market price. Total producer surplus equals:     A-the area above the supply curve and beneath the market price. B-the area beneath the supply curve and above the demand curve. C-the market price. D-the supply curve. An increase in supply refers to:    ...
1. Draw the market for electric vehicles in initial equilibrium. Be sure to label the axes...
1. Draw the market for electric vehicles in initial equilibrium. Be sure to label the axes and the curves/lines. Clearly demonstrate the initial equilibrium price and quantity. 2. Suppose the cost of lithium-ion batteries, an input into the production of electric vehicles, has dropped more steeply than expected. Use the 4-step process to demonstrate the effect of this change in the market for electric vehicles. Explain why you have drawn the change you have. 3. Has there been a change...
Question 1 The table below shows John’s, Jack’s, and Jill’s individual demand schedules for apples. P...
Question 1 The table below shows John’s, Jack’s, and Jill’s individual demand schedules for apples. P is the price of apples in US dollars per pound ($/lb), and ?? is the quantity demanded in pounds of apples per week (lbs/week) at each given price. John’s Demand Schedule Jack’s Demand Schedule Jill’s Demand Schedule Market Demand Schedule P ?? P ?? P ?? P ?? 1.00 7 1.00 7 1.00 7 1.50 6 1.50 5 1.50 6 2.00 5 2.00 4...
ECO 101-S70: Final Quiz 2 CHAPTER 3: Demand, Supply and Equilibrium 1. Which of the following...
ECO 101-S70: Final Quiz 2 CHAPTER 3: Demand, Supply and Equilibrium 1. Which of the following could cause a decrease in consumer demand for product X? a.   a decrease in consumer income b.   an increase in the prices of goods which are good substitutes for product X c. an increase in the price which consumers expect will prevail for product X in the future d. a decrease in the supply of product X 2. If two goods are substitutes for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT