Floating exchange rate system, Managerial Economics

1. The price of a U. S. produced hammer is $5. The exchange rate with Malaysia is 3 Ringgit/1$. What is the current price of the hammer in Malaysia? (Assume no transportation cost.) If the exchange rate falls to 2 Ringgit/1$, what will the new price of the hammer be?

2. If a country runs a current account deficit, what must happen? (Include both general scenarios)

3. Consumers in Sweden develop a strong preference for Canadian maple syrup. Draw what will happen without any central bank intervention.

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Posted Date: 3/13/2013 6:35:30 AM | Location : United States

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