Ch 5 Global Trade [AP & Reg]

Value answer 2 due to the decrease in supply of us

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Unformatted text preview: f the exchange rate changes from $1=Y200 to $1=Y100, we can say the dollar has (apprec/deprec) in value & Japan’s exports to the U.S. (incr/decr). 31. Depreciation of the euro relative to the U.S. dollar would make a trip by an American to Europe (more/less) expensive. 32. Suppose that yesterday $1 would buy 800 South Korean won, but today will buy 810 won. We can conclude that the won has (depr/apprec) in value. Higher I. R.’s or Lower PL Appreciate the S2 D2 D1 S1 200 Price of the Yen depreciates as it takes more Yen to buy a dollar. Yen depreciates even more as it takes even more to buy a dollar. U.S Price level Decreases or U.S. Interest rates Increase 150 100 D D 50 0 Quantity of Dollars Japanese buy more U.S. X U.S. citizens buy M fewer Japanese A Increase in the demand for ’s Decrease in the supply of ’s for Appreciates Double Shifts: Although there are double shifts in some situations, Double Shifts: it doesn’t change the appreciation/depreciation answers. So – let’s just concentrate on the demand curve for each situa...
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This note was uploaded on 07/20/2012 for the course ECON 2106 at GCSU.

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