Batteries are one of the major imports of the US from China. Batteries cost 10 Yuan...
Batteries are one of the major imports of the US from China. Batteries cost 10 Yuan in China.
a) If the exchange rate is 7 Yuan/$, how much does the battery cost in the US?
b) If the Dollar appreciates to 8 Yuan/$, how much does the battery cost in the US now? Assume that the price of the battery does not change.
c) What happens to the import of batteries from China? What happens to the NX of the US?
d) If the Yuan appreciates to 6 Yuan/$, how much does the battery cost in the US now? Assume that the price of the battery does not change.
e) What happens to the import of batteries from China? What happens to the NX of the US?
Homework Answers
(a)
Cost of battery in US = 10/7 = $1.43
(b)
New Cost of battery in US = 10/8 = $1.25
(c)
Since cost of battery in US in terms of dollar has decreased, US will increase its impot demand from China. So, import will increase from China, and net exports will decrease in US.
(d)
New Cost of battery in US = 10/6 = $1.67
(e)
Since cost of battery in US in terms of dollar has increased, US will decrease its impot demand from China. So, import will decrease from China, and net exports will increase in US.
Add Answer to:
Batteries are one of the major imports of the US from China.
Batteries cost 10 Yuan...
6 24 2 8. Then use the following information to show the impact of a change...
6 24 2 8. Then use the following information to show the impact of a change in exchange rate on the trade balance Suppose that there are two goods sold in China and in the U.S When the exchange rate is 1USD = 6 yuan a car cost $50,000 in US and 0,000 yuan in China and the price of a shirt is $20 in U.S and 120 yuan in China. US imports the shirt and exports the cars 30...
Suppose that a Big Mac costs $5 in the US, and Yuan 50 in China. You...
Suppose that a Big Mac costs $5 in the US, and Yuan 50 in China. You are told that the exchange rate between $ and Yuan is Yuan=$10 From what you know about PPP theory and Law of One Price, the market value of the Yuan is.. 4 Points a. Just right! b. Overvalued; it should be about Yuan=$0.1 c. Undervalued; it should be about Yuan=$0.1 d. Overvalued; it should be about Yuan=$1
yuan At various times over the past ten years, economists in Western countries have felt that...
yuan At various times over the past ten years, economists in Western countries have felt that China was manipulating the value of its currency, keeping it artificially low in order to give the country an export advantage. The point is that if the yuan is valued at less than it's actually worth, imported goods will cost more in yuan than they should, and that will make imports less attractive to Chinese buyers, leading to an export advantage. Some economi sts...
Consider a US firm that imports components from China, and adds value by assembling these components...
Consider a US firm that imports components from China, and adds value by assembling these components into a finished product in the US. Assume that the US firm always pays in RMB (Chinese Remnibi) for the components. Suppose the cost of imported components is RMB 25, while domestic assembly costs to finish the product are $5, and the current exchange rate is RMB5/$. 1) Case A: If the US firm was selling 100% of the finished product output in the...
1. Why do you think that the Chinese historically pegged the value of the yuan to...
1. Why do you think that the Chinese historically pegged the value of the yuan to the U.S. dollar? 2. Why did the Chinese move to a managed-float system in 2005? 3. What are the benefits that China might gain by allowing the yuan to float freely against other major currencies such as the U.S. dollar and the euro? What are the risks? What do you think they should do? 4. Is there any evidence that the Chinese kept the...
4. Because of a potential ban on imports of such machines from China, the cost of...
4. Because of a potential ban on imports of such machines from China, the cost of machines might change. Explain as precisely as possible how L*(q) and K*q) change as r changes, assuming wages remain the same.
Assume the United States exports 1,500 computers at a price of $2,000 cach and imports 100...
Assume the United States exports 1,500 computers at a price of $2,000 cach and imports 100 UK autos at a price of £15,000 each. Assume that the dollan/pound exchange rate is $2 per pound. balance prior to a depreciation of the dollar's exchange value. 2. (5 points) Suppose the dollar's exchange value depeeciates by 10 percent. Assuming that the price clasticity of demand for U.S. exports equals 5 and the price elasticity of demand for U.S imports equals 1, does...
7) What is (are) a major factor(s) contributing to Europe's poor economic recovery? A) Increased growth in China &a...
7) What is (are) a major factor(s) contributing to Europe's poor economic recovery? A) Increased growth in China & emerging markets. B) A strong euro. C) Slow growth in China & emerging markets. D) B&C. 8) If the cost of oil goes down in US dollars, but the value of the US dollar climbs against the euro: A) The effect of the price of oil for Europeans is uncertain. B) Oil is cheaper for European buyers. C) Oil is more...
1.) What a country imposes tariffe, if is likely to cause A.) increase quantities of imports...
1.) What a country imposes tariffe, if is likely to cause A.) increase quantities of imports B higher price for the import competing goods C. lower price for domestic production D.) less expensive export 2.)A(n) is a trade policy by which a nation agrees to limit itseport of a good in order to avond more restrictive trade polices A) Tarif B) (VRA) Voluntary restraint agreement C.Jimport quota D) inpeat ban 3.) Appreciation of the dollar will A. decrease the prices...
Consider world consisting of two trading entities: the US and the EU. The EU is the exporter of cheese to the US and the importer of oil from the US. Assume the world price of both cheese and oil are set in terms of dollars ($). Also assume that there is
Consider world consisting of two trading entities: the US and the EU. The EU is the exporter of cheese to the US and the importer of oil from the US. Assume the world price of both cheese and oil are set in terms of dollars ($). Also assume that there is no barriers or restrictions on trade for either good. Also assume that the entire exchange between the US and EU is made of trade account transactions and that there...
6 24 2 8. Then use the following information to show the impact of a change in exchange rate on the trade balance Suppose that there are two goods sold in China and in the U.S When the exchange rate is 1USD = 6 yuan a car cost $50,000 in US and 0,000 yuan in China and the price of a shirt is $20 in U.S and 120 yuan in China. US imports the shirt and exports the cars 30...
yuan At various times over the past ten years, economists in Western countries have felt that China was manipulating the value of its currency, keeping it artificially low in order to give the country an export advantage. The point is that if the yuan is valued at less than it's actually worth, imported goods will cost more in yuan than they should, and that will make imports less attractive to Chinese buyers, leading to an export advantage. Some economi sts...
4. Because of a potential ban on imports of such machines from China, the cost of machines might change. Explain as precisely as possible how L*(q) and K*q) change as r changes, assuming wages remain the same.
Assume the United States exports 1,500 computers at a price of $2,000 cach and imports 100 UK autos at a price of £15,000 each. Assume that the dollan/pound exchange rate is $2 per pound. balance prior to a depreciation of the dollar's exchange value. 2. (5 points) Suppose the dollar's exchange value depeeciates by 10 percent. Assuming that the price clasticity of demand for U.S. exports equals 5 and the price elasticity of demand for U.S imports equals 1, does...
7) What is (are) a major factor(s) contributing to Europe's poor economic recovery? A) Increased growth in China & emerging markets. B) A strong euro. C) Slow growth in China & emerging markets. D) B&C. 8) If the cost of oil goes down in US dollars, but the value of the US dollar climbs against the euro: A) The effect of the price of oil for Europeans is uncertain. B) Oil is cheaper for European buyers. C) Oil is more...
1.) What a country imposes tariffe, if is likely to cause A.) increase quantities of imports B higher price for the import competing goods C. lower price for domestic production D.) less expensive export 2.)A(n) is a trade policy by which a nation agrees to limit itseport of a good in order to avond more restrictive trade polices A) Tarif B) (VRA) Voluntary restraint agreement C.Jimport quota D) inpeat ban 3.) Appreciation of the dollar will A. decrease the prices...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago