Question

Please only answer if you are 100% sure and I need the answers now.

QUESTION 16

1. Suppose that the current dollar/peso exchange rate is $.12/peso, but both the US and Mexican central banks believe that the exchange rate should be 9 pesos/$. If both nations decide to use sterilized market intervention to achieve the desired exchange rate, which of the following will occur?

   		The Mexican central bank will sell dollars, buy pesos, and conduct an open market sale of Mexican government treasury securities.
   		The US central bank will buy dollars, sell pesos, and conduct an open market sale of US government treasury securities.
   		The Mexican central bank will buy dollars, sell pesos, and conduct an open market purchase of Mexican government treasury securities.
   		The US central bank will buy dollars, sell pesos, and conduct an open market purchase of US government treasury securities.
   		None of the above

5 points   

QUESTION 17

1. Currency	Bank Quotes (in Canadian dollars)
   Hong Kong Dollar	C$.15
   Thai Baht	C$.03

   How many Hong Kong dollars would you receive for 600,000 Baht? Round intermediate steps to four decimals.

   		120,000
   		3,000,000
   		2,700
   		18,000

5 points   

QUESTION 18

1. The product cycle theory uses comparative advantage to explain the existence of international trade.

   True

   False

5 points   

QUESTION 19

1. The current quote for euros is $1.240-55. Find the bid-ask spread. Round intermediate steps and your final answer to four decimals and enter your answer in decimal format (EX: .XXXX).

5 points   

QUESTION 20

1. Suppose national income in the UK was 2.5 trillion pounds in 2017 and 2.11 trillion pounds in 2018. All else being equal, this change in national income would result in an increase in the United Kingdom's balance of trade from 2017-2018.

   True

   False

Answer 1

Answer 16) Current exchange rate =0.12$/peso => 8.333 peso/$

Expected exchange rate = 9 Peso/$, that indicate strength in dollar .

Option : The US central bank will buy dollars, sell pesos, and conduct an open market sale of US government treasury securities.

Answer 17) Current exchange rate : 1HK$ = C$ 0.15  

1 Thai Bhat = C$ 0.03

=> 1HK$ =5 Thai Bhat

=> 600,000 Thai bhat = 600,000/5 HK$ = 120,000 HK$ Option A

Answer 18) True

Answer 19) Spread = 1.255 - 1.240 = 0.015.

Answer 20) True