a. What is the difference between the real exchange rate and the nominal exchange rate? b....

 

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a. What is the difference between the real exchange rate and the nominal exchange rate? b. Suppose a 10 pound bag of rice in Vietnam costs 77,000 Dongs, while the same 10 pound bag of rice in the U.S. would cost $17.70. Assume that the nominal exchange rate between the Vietnamese dong and the U.S. dollar is 22,675 dongs = $1. How many 10lb bags of rice can you buy in Vietnam for one 10lb bag of rice purchased in the US? c. Suppose the exchange rate changes to 24,000 dongs = $1. How many bags of rice can you buy in Vietnam for the amount it takes to purchase one bag in the US? What is the effect on US net exports? Explain. a. Major improvements in computer information technology in the 1990s fueled an increase in investment demand in the United States (a large open economy). Graphically illustrate the effect of an increase of U.S. investment using the Large Open Economy Model developed in the appendix of Ch. 6 (Hint: In your model you will need to draw three diagrams). Clearly label the axes and curves in each of your graphs in the model. Clearly indicate the direction of any shifts in the curves. In your model, label the initial equilibrium points as Point A and label the new equilibrium points as Point B. b. Using your model drawn in Part (a), indicate what effect the increase in investment will have on the following economic variables in the United States: (i) real interest rate, (ii) net capital outflow, (iii) real exchange rate, (iv) net exports. Suppose in the town of Oxnard there are 132,000 individuals in the labor force and 124,872 of them are currently employed in February 2018. Assume that the current rate of job separation is 3.5 percent, while the rate of job finding is 20 percent. Assume that the total number of individuals in the labor force in Oxnard remain unchanged over time. a. What is the unemployment rate in Oxnard in February 2018? b. How many employed workers are expected to lose their jobs in February 2018? Round your answer to the nearest whole number. c. How many unemployed workers are expected to find jobs in February 2018? Round your answer to the nearest whole number. (d) Based on your answers in (b) and (c), what will the unemployment rate be at the beginning of March 2018? a. What is the difference between the real exchange rate and the nominal exchange rate? b. Suppose a 10 pound bag of rice in Vietnam costs 77,000 Dongs, while the same 10 pound bag of rice in the U.S. would cost $17.70. Assume that the nominal exchange rate between the Vietnamese dong and the U.S. dollar is 22,675 dongs = $1. How many 10lb bags of rice can you buy in Vietnam for one 10lb bag of rice purchased in the US? c. Suppose the exchange rate changes to 24,000 dongs = $1. How many bags of rice can you buy in Vietnam for the amount it takes to purchase one bag in the US? What is the effect on US net exports? Explain. a. Major improvements in computer information technology in the 1990s fueled an increase in investment demand in the United States (a large open economy). Graphically illustrate the effect of an increase of U.S. investment using the Large Open Economy Model developed in the appendix of Ch. 6 (Hint: In your model you will need to draw three diagrams). Clearly label the axes and curves in each of your graphs in the model. Clearly indicate the direction of any shifts in the curves. In your model, label the initial equilibrium points as Point A and label the new equilibrium points as Point B. b. Using your model drawn in Part (a), indicate what effect the increase in investment will have on the following economic variables in the United States: (i) real interest rate, (ii) net capital outflow, (iii) real exchange rate, (iv) net exports. Suppose in the town of Oxnard there are 132,000 individuals in the labor force and 124,872 of them are currently employed in February 2018. Assume that the current rate of job separation is 3.5 percent, while the rate of job finding is 20 percent. Assume that the total number of individuals in the labor force in Oxnard remain unchanged over time. a. What is the unemployment rate in Oxnard in February 2018? b. How many employed workers are expected to lose their jobs in February 2018? Round your answer to the nearest whole number. c. How many unemployed workers are expected to find jobs in February 2018? Round your answer to the nearest whole number. (d) Based on your answers in (b) and (c), what will the unemployment rate be at the beginning of March 2018?

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