hw8f06 - deficit ? b) Which will tend to have a balance of...

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Print name______________________ Sign name ___________________________ Econ 520 F06 Homework 8 11/21, 28, 30, due 12/1 (due to Thanksgiving holiday) 8.1 (10 HW points) If US inflation is 6%, while European inflation is 4%, what rate of change of the foreign exchange value of the dollar (expressed in terms of €/$, i.e. euros per dollar) is predicted by Purchasing Power parity? Show your calculation: 8.2 (10 HW points) Show, with a diagram, the effect on the foreign exchange demand and/or supply of dollars of an increase in demand by foreigners for investment in the United States. What will be the effect on the equilibrium foreign exchange value of the dollar (expressed in terms of foreign currency per dollar)?
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2 10.1 (20 HW points) a) If the European Central Bank (ECB) undertakes to fix the value of the Euro in terms of the Japanese yen at a rate that undervalues the euro , which country, “Euroland” or Japan, will tend to have a balance of payments
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Unformatted text preview: deficit ? b) Which will tend to have a balance of payments surplus ? c) Which Central Bank (Bank of Japan, ECB, both, or neither) will tend to lose foreign reserve assets? d) Which Central Bank (BOJ, ECB, both or neither) will tend to accumulate foreign reserve assets? e) Which Central Bank (BOJ, ECB, both, or neither) will tend to have a Balance of Payments Problem ? 8.3. (10 homework points) Match the indicated international monetary system with its approximate period of operation: Bretton Woods System 1879-1914 Uniform International Bimetallic Standard 1925-1931 Gold Exchange Standard 1958-1968 Floating Exchange Rates 1973-present International Gold Standard No such international monetary system 8.4. (15 homework points) Which of the following countries are participating in the Euro? (Circle those that are – this list is not exhaustive) 3 United Kingdom Sweden Ireland Denmark France Finland Spain Russia Germany Poland Austria Belgium Switzerland Netherlands Norway...
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This note was uploaded on 07/17/2008 for the course ECON 520 taught by Professor Ogaki during the Fall '07 term at Ohio State.

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hw8f06 - deficit ? b) Which will tend to have a balance of...

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