CHAPTER 4 - sometimes not respond to a trade deficit...

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CHAPTER 4 Assume the spot rate of the pound is $1.73. The expected spot rate 1-year from now is $1.66. what percentage depreciation does this reflect?
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CHAPTER 4 Assume that US inflation becomes high relative to Canadian inflation. Other things equal, how should this affect the US demand for Canadian dollars, the supply of Canadian dollars for sale, and the equilibrium value of the Canadian dollar?
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CHAPTER 4 Assume US interest rates fall relative to UK interest rates. Other things equal, how should this affect the US demand for pounds, the supply of pounds for sale, and the equilibrium value of the pound?
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CHAPTER 4 What is the expected relationship between the relative real interest rates of two countries and the exchange rate of their currencies?
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CHAPTER 4 Why do you think a trade deficit announcement sometimes has a significant impact on foreign exchange trading?
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CHAPTER 4 Why do foreign exchange traders
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Unformatted text preview: sometimes not respond to a trade deficit announcement, even when the deficit is very large? CHAPTER 4 Explain why the value of the pound against the dollar will not always move in tandem with the value of the euro against the dollar. CHAPTER 4 In the 1990s Russia was attempting to import more goods but had little to offer other countries in terms of potential exports. In addition, Russias inflation rate was high. Explain the type of pressure that these factors placed on the Russin currency. CHAPTER 4 If countries experience a decline in economic growth, and experience a drop in inflation and interest rates as a result, how will their currencies values, relative to the US dollar, be affected? CHAPTER 4 Why do you think most crises in countries cause the local currency to abruptly weaken? Is it because of trade or capital flows?...
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CHAPTER 4 - sometimes not respond to a trade deficit...

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