THE GEORGE WASHINGTON UNIVERSITY
Department of Economics
ECON 6280 (SECTION 13) - Survey of International Economics
Quiz 2 (50 points)
This quiz will make up 10 percent of your final grade. It is
i ; ' ;
of mesa commas far decade's. CHINAS OBSOLETE ECONOMIC STRATEGY _
,L How China deals with its problems will have farreaching
implications because the country has become such a big
part of the 919919 economy It is one of 9:9 biggest ' ' '
EXCHANGE RATES IN THE SHORT RUN
I. Change. in foreign exchange rates on a day-to-day or month-to-month basis are
2. Over 90% of month-to-month movements in exchange rates are expected, and
let: that l0% are predictable
Suppose that two countries, Vietnam and Cte dIvoire, produce coffee.
The currency unit used in Vietnam is the dong (VND). Cte dIvoire is a
member of Communaut Financire Africaine (CFA), a currency union of West
African countries that use the CFA
Below is a partial table of the OECDs 2004 ranking of member countries
based on their GDP per capita. Compute the ratio of GNI to GDP in each case.
What does this imply about net factor income from abroad in each country?
Compute the GNI ranking
1. Use the money market and FX diagrams to answer the following
questions about the relationship between the British pound () and the U.S.
dollar ($). The exchange rate is in U.S. dollars per British pound E$/. We
want to consider how a change in
Using the notation from the text, answer the following questions. You may
assume that net labor income from abroad is zero, there are no capital gains on
external wealth, and there are no unilateral transfers.
o Express the change in external we
1. Refer to the exchange rates given in the following table:
Based on the table provided, answer the following questions:
Compute the U.S. dollaryen exchange rate E$/ and the U.S.
dollarCanadian dollar exchange rate E$/C$ on June 25, 2010, and Ju
National flows of expenditure, product, income, and wealth, and
international flows of goods, services, income, and assets, together measure
important aspects of a countrys economic performance and describe its
economys relationship to economi
Countries can use their external wealth as a buffer to smooth consumption
in the face of fluctuations in output or investment. However, this process is not
without its limits. The country must service its debts and must not allow debts
Our theory of exchange rates builds on two ideas: arbitrage and
expectations. First, we developed the theory for the case of floating exchange
In the short run, we assume prices are sticky and the asset approach to
exchange rates is va
The exchange rate in a country is the price of a unit of foreign currency
expressed in terms of the home currency. This price is determined in the spot
market for foreign exchange.
When the home exchange rate rises, less foreign currency is b
THE GEORGE WASHINGTON UNIVERSITY
ECON2182 Section 12
International Macroeconomic Theory and Policy
MW 2:20 pm 3:35 pm
Location: FNGR 208
Name: Ferhat Bilgin
Office: Monroe 308
he Double-Entry Principle in the Balance of Payments
We can make the double-entry principle more concrete by looking at some (mostly) hypothetical
international transactions and figuring out how they would be recorded in the U.S. BOP accounts.