Econ 201 midterm 2 soln

Econ 201 midterm 2 soln - Solution Set - Version One...

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Solution Set - Version One Multiple Choice Section A B C D Question 1. Question 2. Question 3. Question 4. Question 5. Question 6. Question 7. Question 8. Question 9. Question 10. Question 11. Question 12. Question 13. Question 14. Question 15. Q16. a) Equilibrium exchange rate in China is 7 yuan/$. r China < r USA Yuan / $ 8 Yuan / $ 7 Yuan / $ S $ S $ D $ Q 1 Q 0 Q $ Supply of $ falls as Americans opt to save in the US (Americans stay home). In the Chinese forex market, $ appreciates, Yuan depreciates. 1
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$ / Yuan $0.142 /Yuan $0.125 /Yuan S yuan D yuan Q 1 Q 0 Q yuan D yuan Demand for Yuan falls as Americans opt to save in the US (Americans stay home). $ appreciates, Yuan depreciates. 17. AE AE 0 AE 1 45 ° (Y = AE) Y Y 1 Y 0 Y Y 1 Y 0 P P 1 P 0 AD A B Autonomous Expenditure " ; purchasing power # (holding income constant), C # ; AE # ; so Q AD # and there is a movement from A to B . 2
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This note was uploaded on 04/07/2008 for the course ECON 201 taught by Professor Witte during the Spring '08 term at Northwestern.

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Econ 201 midterm 2 soln - Solution Set - Version One...

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