Tutorial 11_2010 - ECON1002 Introductory Macroeconomics, S2...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON1002 Introductory Macroeconomics, S2 2010 Tutorial Tasks 1 R EADING G UIDE : BOF C HAPTER 16. Y OU SHOULD ALSO LOOK OVER YOUR LECTURES NOTES FOR W EEK 11. T HE FOLLOWING READINGS ( ALL AVAILABLE THROUGH B LACKBOARD ) WILL BE USEFUL . K EY C ONCEPTS : N OMINAL AND R EAL E XCHANGE RATES , P URCHASING POWER PARITY , E QUILIBRIUM EXCHANGE RATES , THE R ELATIONSHIP BETWEEN M ONETARY POLICY AND E XCHANGE RATES . P ROBLEMS N OTE THAT P ROBLEMS 2 AND 3 ARE AVAILABLE FOR STUDENTS PRESENTATION . 1. How would each of the following be likely to affect the value of the dollar, all else being equal? Explain. a. Australian shares are perceived as having become much riskier financial investments. b. European computer firms switch from Australian-produced software to software produced in India, Israel and other nations. c. As East Asian economies recover, international financial investors become aware of many new, high-return investment opportunities in the region. d. The Australian government imposes a large tariff on imported automobiles. e. The Reserve bank reports that it is less concerned about inflation and more concerned about an impending recession in Australia. f. Australian consumers increase their spending on imported goods. 2. A British-made car is priced at 20,000 pounds and a comparable Australian-made car costs $26,000. One pound trades for $1.50 in the foreign exchange market. Find the real exchange rate for cars from the perspective of Australia and from the perspective of Great Britain. Which country’s cars are more competitively priced?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/14/2010 for the course ECON 1002 taught by Professor Markmelatos during the Three '10 term at University of Sydney.

Page1 / 4

Tutorial 11_2010 - ECON1002 Introductory Macroeconomics, S2...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online