Calculate the dollar exchange rate, International Economics

Assignment Help:

Assume the United States exports 1000 computers at a price of $3000 each and imports 15 UK autos at a price of 10000 pounds each. Assume that the dollar/pound exchange rate is $2 per pound.

a. Calculate in dollar terms, the US export receipts, import payments and trade balance prior to a depreciation in the dollar's exchange rate.

b. Suppose the dollar's exchange value depreciates by 10%. Assuming that the price elasticity of demand for US exports equals 3.0 and the price elasticity of demand for US imports equals 2.0, does the dollar depreciation improve or worsen the US trade balance? Why?

c. Now assuming that the price elasticity of demand for US exports equals 0.3 and the price elasticity of demand for US imports equals 0.2. Does this change the outcome? Why?

 


Related Discussions:- Calculate the dollar exchange rate

Consumers and businesses, if the US dollar depreciates dramatically relativ...

if the US dollar depreciates dramatically relative to the Chinese yuan, what effect would this have on consumers and businesses in each country? When is a falling dollar good or ba

Characteristics of human resources, Characteristics of human resources in t...

Characteristics of human resources in the International Medical Center are their diversity and versatility; we find jurisdiction in the field of advanced medicine, we find at the s

Nature and basis of international trade, discus how every economy is essent...

discus how every economy is essentially part of the international economy

Opportunity cost, Using examples, from the government, illustrate the signi...

Using examples, from the government, illustrate the significant opportunity cost.

Initial public offerings ipo, THE SETTING Country X is blessed with large r...

THE SETTING Country X is blessed with large reserves of natural resources, spectacular physical landscape and a moderate climate. It is inhabited by a well educated and industrious

International trade, why is international trade important for south africa

why is international trade important for south africa

Economic growth, roles of international trade in economic growth of the cou...

roles of international trade in economic growth of the country

True or false, in a mixed economy, the government tries to help meet the ne...

in a mixed economy, the government tries to help meet the needs of the public on a limited basis

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd