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

Resarch paper, i need to do term paper international economics related. the...

i need to do term paper international economics related. the paper have to be empirical paper. Writing an Empirical Paper in APA Style 1- Title Page 2- Abstract 3- Introduction 4-

Explain why despite enormous natural resources, Q. Explain why despite enor...

Q. Explain why despite enormous natural resources, much of Latin America's population remains in poverty and the region has been repeatedly experiencing financial crises. Answe

What is securitization, Q. What is securitization? Answer: The ...

Q. What is securitization? Answer: The term refers to monetary instruments in which bank assets are repackaged in readily marketable forms These kinds of "derivatives"

International trade, explain various gains from international trade

explain various gains from international trade

Trade theory, what you do understand by the term effective rate of protecti...

what you do understand by the term effective rate of protection

Heckscher-Ohlin Model, Using the Heckscher-Ohlin model, discuss how the dif...

Using the Heckscher-Ohlin model, discuss how the differences in supply and demand conditions between countries create a basis for trade.

Alternative theories of trade, How can I present the theories step by step ...

How can I present the theories step by step in an assignment?

Heberler''s theory of opportuinity., discuss the superiority of haberler''...

discuss the superiority of haberler''s theory of opportuinity cost over mill''s theory reciprocal demand?

calculate the gross and net national product, Given the following hypothet...

Given the following hypothetical data (in millions of naira): 1.    gross private domestic investment        N59 2.    contributors for social insurance           N8 3.    inter

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