Ch 5 Global Trade [AP & Reg]

S dollar show how an increase in us firms direct

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: currency moves. S D2 e1 e2 Appreciate $ Price of Yen Y en P r i c e o f $ 1. Show how an “ increase in taste” increase for Japanese cars would affect the market for the Yen and the Dollar. D # of Yen D2 e1 Depreciate e2 Peso Price of Euro S Won Price of $ Euro Price of peso # of Pesos D D D S S2 e1 e2 Depreciate # of Dollars S S2 e1 e2 Depreciate # of Euros S2 S e2 e1 Appreciate # of Dollars # of Won $ Price of Yen 4. How would a U.S. economic expansion affect the value of the expansion Dollar and the value of the Yen? $ Price of Won 3. How would high inflation in South Korea affect the market for the Won and the Dollar? S e1 D e1 e2 Depreciate # of Dollars e2 Appreciate Y en P r i c e o f $ 2. How would an increase in Mexico’s real interest rate affect the value of real the Peso and the value of the Euro? D D2 S S2 D D D2 S e2 Appreciate e1 # of Yen Therefore, it takes fewer Therefore, pennies, so the dollar is pennies, stronger [$ price decreases] [$ Therefore, it takes more pennies, so the dollar is pennies, weaker. [$ price increases] [$ Appreciation of the Dolla...
View Full Document

Ask a homework question - tutors are online