## Determine the exchange rate, Macroeconomics

Assignment Help:

Q. Determine the Exchange rate?

Exchange rate is determined by the ratio of domestic price level to the foreign price level. If, for instance domestic prices increase by 10% whereas foreign prices are constant, domestic currency will depreciate by 10% against foreign currency.

With this assumption, imports and exports may be assumed to be independent of the domestic price level. If domestic prices increase by 10% whereas the currency loose 10%, price of domestically produced goods abroad would be unchanged.

#### Mec, Lucas’ point of view, what are the limitations of the Keynesian model?...

Lucas’ point of view, what are the limitations of the Keynesian model? What improvements does he suggest?

#### Bank of canada announces that it will raise the money supply, Suppose the B...

Suppose the Bank of Canada announces that it will raise the money supply in the future but does not change the money supply today. Using the Fisher equation, explain what happens t

#### National income, working of static and dynamic multiplier in consumption fu...

working of static and dynamic multiplier in consumption function

#### Budget constraint, The consumer's utility function is u(x1,x2) = (x1) (x2)^...

The consumer's utility function is u(x1,x2) = (x1) (x2)^2 (a) Graph his budget constraint for p1 = 3, p2 = 2 and M = 900, and write down the equation for his budget line. (b)

#### Major union wage settlement, Show the effects on the price level and real G...

Show the effects on the price level and real GDP of a major union wage settlement that significantly increases wages. Is this a supply shock, a demand shock, or both?

#### Show the different kinds of unemployment, Q. Show the Different kinds of un...

Q. Show the Different kinds of unemployment? All unemployed individuals are presumed to belong to exactly one of these categories so that if we sum unemployment from each categ

#### Give example to calculate the price level, Give example to calculate the pr...

Give example to calculate the price level Imagine that we have created a particular basket of services and goods. We calculate price level at four different points in time duri

#### Intermediate macroeconomics, An economy's IS and LM curves are given by the...

An economy's IS and LM curves are given by the following equations: with Y indicating output (income), c indicating the marginal propensity to consume, I investment, G gove

#### Decrease at the rate of subsequent withdrawals, How much do you have to dep...

How much do you have to deposit today in order to allow 5 annual withdrawals, beginning at the end of year 8, with the first withdrawal of \$1000 with subsequent withdrawals decreas

#### Same Basket of Goods, assume the cost of a market basket in 2008 is 1717.0....

assume the cost of a market basket in 2008 is 1717.0. Calculate the cost of the same basket of goods and services in 2007. Price index in 2008 was 100 and price index in 2007 was  