Could you check my answer down below and if wrong can you correct it?
I attached my answer for the reference.
Q1: f
Q2: d
Q4: c
Q6: 45%
Question 1 N t t Suppose the peso is said to be undervalued relative to the dollar in a fixed exchange rate system.Which of the following are implications of 0 ye answered this: points out of (Assume 35 are on the horizontal axis of S&D graph). 10.00 V Flag 0 a. If let to float, Epesos/s would fall. question 0 b. Mexico's monetary authority would have to sell dollars and buy up pesos to maintain the existing exchange rate. 0 c. if you believe that all of the other listed options are correct, then choose this option. 0 d. if you believe that none of the other listed options are correct, then choose this option. 0 e. If let to float, the dollar would depreciate. O f. if you believe that two of the other listed options are correct, then choose this option. Question 2 Not yet answered Points out of 9.00 (7 Flag question If the monetary authority of the FOREIGN country increased its money supply M: (which in turn impacts iF) then: Oa. Ob. Oc. Od. Oe. Of. Og. if you believe it would imply three of the other listed options, choose this option. if you believe it would imply two of the other listed options, choose this option. In the long run (Monetary Approach), we should see the re_al rate of interest in the foreign country decrease below the Lal rate of interest in the home country. In the home country we would expect to see EH\": falling according to the Asset Approach model (SR), other things constant, assuming a floating exchange rate system. if you believe it would imply none of the other listed options, choose this option. In the long run (Monetary Approach), we would expect to see an increase in the ratio PH/PF if the home country also raised its nominal money supply (MH) by the same percentage amount. According to the Asset Approach, in the home country we should expect to see an increased willingness to sell home currency for foreign currency in order to buy more foreign bonds (assume a floating exchange rate). Quesmn 4 Suppose you observe EHomelForeign falling. Which of the following statement is TRUE? Unless otherwise stated, assume a floating Not yet exchange rate system. answered POimS 0'\" 0* O a. this change would make sense in the short run (Asset Approach model) if the foreign return (FR) was greater than the domestic 9'00 return (DR) at the initial exchange rate (7 Flag _ _ _ _ _ question 0 b. If you belleve that two of the other listed options are correct, choose this. 0 c. this change would make sense if a country that was initially on a fixed exchange rate system was to abandon this regime, assuming that the home currency was "undervalued" at the fixed rate 0 d. this would be the same thing as saying there has been an appreciation in the foreign country's currency relative to the home country currency 0 e. this change would make sense in the short run (Asset Approach model) if the home country increased its home money supply (other things constant). 0 f. Assuming no change in (EeH/F) or foreign interest rate (iF), this change would not be possible in the Asset Approach model. 0 9. this change would be what one predicted in the long run (Monetary Approach model) if the foreign money supply fell and the home money supply remained the same. Question 6 Answer saved Points out of 10.00 F Flag question Suppose we assume that Absolute PPP is valid in the long run. Suppose the real exchange for $ foreign (eUS/F) is currently equal to 0.50 and that 50% of the gap between its current actual value and its long-run equilibrium value remains after each year. The expected inflation rates of over the coming year are 25% for the US and 30% for Foreign. We would predict that the nominal exchange rate (E$/F) would change in percentage terms by % over the year (if negative, put in negative sign before number). NOTE: round off to zero decimal places. For example, if you calculated 23.333 you would round off to 23; 58.50 would be 59
