Question

If the expected exchange rate appreciates. the current exchange rate immediately appreciates.

(True, false, or uncertain) explain briefly.

Answer #1

**True**

If the expected exchange rate appreciate then it will affect the current exchange rate as well.

For example:-

If there is increase in expected exchange rate of $ per £ . Which means in future £ will appreciate and $ will depreciate. Now the investor would more attracted to the British investments as compare to american investments. demand for £ will increases and exchange rate will shift to the higher level. Current exchange rate of $ per £ will also increases. Which shows £ is appreciate due to expected appreciation of exchange rates in future.

Answer True, False, or uncertain and briefly explain your
reasoning. "A depreciation of the (real) exchange rate always
increases net exports."

True, False or Uncertain
If the $C exchange rate with the $US was 1 and the $C exchange
rate with the Euro was 1.50, while the $US exchange rate with the
Euro was 1.25, you could make a fortune trading these
currencies.

Label each of the following statements true, false, or
uncertain. Explain your choice carefully.
a. When domestic inflation equals foreign inflation, the real
exchange rate is fixed.
b. A devaluation is an increase in ? when the nominal exchange
rate ? is defined as the price of the domestic currency in terms of
foreign currency.
c. A change in the expected future exchange rate changes the
current exchange rate.
d. Because economies tend to return to their natural level of...

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Based on the Solow growth model, different saving rates explain
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A competitive equilibrium of the Solow growth model is achieved
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assumption, the indifference curves representing her preferences
are necessarily...

Briefly explain after you decide if the statement is True, False
or Uncertain
1. The Original Philips Curve (before 1970s) uses expected
inflation as last year’s inflation
2. Using the Solow growth model, with or without technology, an
economy that increases its saving rate will always experience
faster growth
3. When labor force is constant, if the number of employed
workers in a country decreases, the unemployment rate in the
country will increase
4. The zero lower bound refers to...

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According to the “liquidity preference theory” of the yield
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By the CAPM, stocks with the same beta have the same
variance
If CAPM holds, α should be zero for all assets.
Optimal portfolios should exclude individual assets whose
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A stock with high standard deviation may contribute less to
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True or false or uncertain?
In the Solow model, a change in population growth rate affects
the level of per capita income, but it has no effect on the
long-run growth rate of per capita income.

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