10. 11. 12, 13. 14. 15. 16. 17. 18. What is an exchange rate? Assume you have $25,000, if the exchange rate between the 5 and the British pound is 51 = 0.75 pounds, then how many pounds can you exchange your 525,000 for? If the exchange rate goes from $1 = 15 pesos to $1 = 20 pesos, what happened to the value of the $? Appreciate or depreciate? If you had 5100, and the exchange rate is 51 = 20 pesos and shoes in Mexico cost 100 pesos, how many shoes can you buy? Now, using the same numbers from question 4, if the exchange rate is 51 = 10 pesos, how many shoes can you buy from Mexico? The price is 100 pesos for shoes. Using the information from questions 4 and 5, what happened to the value of the U.5. dollar? Appreciate or depreciate? Using the information from questions 4 and 5, what happened to the value of the Mexican peso? Appreciate or depreciate? Who benefits from a stronger U.5. dollar? Who benefits from a weaker U.5. dollar? If the rate of return increases in Colombia, relative to the U.5., then what will happen to the value of the U.S. dollar? Appreciate or depreciate? Assume that your country is in a Recessionary Gap: a. What monetary policy would you recommend? Expansionary or contractionary? What would happen to the interest rates? What happens to Business Investment? What happens to AD? What happens to Price Level in the U.5.7 o 0T g. Because of this change what will happen to the Supply of the 5 in the foreign exchange market? h. What will happen to the value of the 57 i. What will happen to Exports? j. What will happen to AD? Assume that U.S. citizens like German goods more: a. What happens to the value of the Euro (currency in Germany)? b. What happens to the value of the 57 c. What happens to exports? d. What happens to imports? e. What happens to AD? f. What happens to Real GDP? What is a budget surplus? What is a budget deficit? What is the national debt? What are progressive taxes? What are regressive taxes? What is the government doing when conducting Expansionary Fiscal Policy? Indicate specifically what tools they use and how they use them