ECON303 - F10

ECON303 - F10 - rates 3 What is the J-curve effect 4...

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Practice Question ECON 303 International Economics l. Draw a graph of the supply of and demand for the Japanese Yen by the U.S. market. Diagram the effect of each of the following on the exchange rate, state in words whether the effect is long, medium, or short run, and explain your reasoning. 1) An economic recession in Japan 2) A rise in Japanese interest rates 3) More rapid growth in the United Sates than in Japan 4) Expectation of a future appreciation in the Japanese Yen I' 2. People know that there will be a massive tax cut soon. How does this fact affect today's exchange
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Unformatted text preview: rates? 3. What is the J-curve effect? 4. Explain the exchange rate overshooting. 5. Chinese domestic price is expected to increase after 2008 Summer Olympic Gaines and people in the United States believe that. How does this fact affect today's exchange rates in the U.S. market? 6. Yesterday European Union refused to lower their interest rates because of recent inflation pressure on their economy. How does this fact affect today's exchange rates in the U.S. market?...
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This note was uploaded on 04/07/2011 for the course ECON 303 taught by Professor Staff during the Fall '08 term at Sonoma.

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