What is the probable effect of each of the following on the exchange rate of a country,

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What is the probable effect of each of the following on the exchange rate of a country, other things being equal?

a. The quantity of oil imports is greatly decreased, but the expenditure on imported oil is higher because of price increases.

b. The country’s inflation rate falls much lower than that of its trading partners.

c. Rising labour costs of the country’s manufacturers lead to a worsening ability to compete in world markets.

d. The government greatly expands its gifts of food and machinery to developing countries.

e. The central bank raises interest rates sharply.

f. More domestic oil is discovered and developed.

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Macroeconomics

ISBN: 9780133910445

15th Edition

Authors: Christopher T S Ragan

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