' @ docs.google.com 4.6 Mon T3 # Olivia - LR AN E X @ Financia Part 3 Stretch Your Thinking- For each of the following financial assets, rank them from 1-8 in each of the three categories, with 1 being the most liquid/highest potential return/highest risk and 8 being the least. Type of Asset Liquidity Risk U.S. treasury bonds Checking account Stocks (individual companies) Stocks (mutual/index funds Money market account Savings account Junk bonds Certificates of deposit Copyright Jacob Ciifford 2020, wwwACDCecon.com Annual license required. Do not use unless you have purchased a license & Add file 10. Based on your rankings in the above chart, what conclusion can you * 1 point draw about the relationship between liquidity and potential rate of return? Explain your reasoning. Your answer 11. What is the relationship between rate of return and risk? Explain why * 1 point this relationship exists. Your answer ' a docs.goc 4.6 Mon SNV SR LE2 EERI 6.4- Eff ] ZIEHE] Part 3 Making Con 1s- The table below shows the price index and nominal interest rate for the US between 1929 and 1933. Fill in the blanks on the table below then answer the questions. Price Index Inflation Rate | Nominal Interest Rate | Real Interest Rate 13.12 -1.15% 5.85% 7.00% 12.60 -3.96% 3.59% 11.34 -10.0% 2.64% 10.05 2.73% 9.78 1.73% Copyright Jacob Clifford 2020. www.ACDCecon.com Annual license required. Do not use unless you have purchas & Add file 9. Given that farming is a seasonal profession where farmers borrow * 1 point money and pay it back after crops are harvested, predict what likely happened to farmers between 1929 to 1932. Explain your reasoning given info from the table. Your answer 10. Based on the table above, what likely happened to the prices of crops ~ * 1 point for farmers between 1929 and 1932? Explain your reasoning. Your answer 11. Considering your answers above, explain why farmers faced some of ~ * 1 point the most significant challenges during the Great Depression. ' @ docs.google.com 4.6 Mon # Olivia - : LAY S 3 ZUEIIY The supply for loanable funds goes up as inter Part 2 - Draw It Part 2: Draw It- Show the effect of each scenario on the real interest rate and the quantity of loanable funds. 4. Businesses expect improvements in economic conditions * 1 point &, Add file 5. The government increases spending without raising taxes * 1 point &, Add file 6. Political unrest causes foreigners to take money out of the economy * 1 point &, Add file Part 3 - Practice n Part 3: Practice- The chart to the right gives information about the country of Sowelltopia. Complete the following assuming that Gross Domestic Product | $24 trillion Sowelltopia has a closed economy. + G h docs.google.com 1 4.5- The. 4.6 Mon.. Edpuzzle Olivia -... Macro T... 4.2- No. 1 4.7- The.. |6.3- The... 6.4- Eff.. 16.6- Rea.. Financia.. Dashbo. Part 1 - Check your Understanding - Assume Exch S Rate that the US and China are trading partners. The graph below shows the demand and supply for Chinese yuan and the exchange rate in dollars. $8 @Copyright Jacob Clifford 2020. www.ACDCecon.com Annual license required. Do not use unless you have purchased a license $7 Economics Worksheets- www.acdcecon.com $5 Q1 Q2 Q3 Q4 Q5 1. Do US citizens or Chinese citizens most likely demand Chinese yuan? * 1 point Explain. Your answer 2. Do US citizens or Chinese citizens most likely supply Chinese yuan? * 1 point Explain. Your answer 3. Explain why the demand curve for yuan is downward-sloping. * 1 point Your answer@ docs.google.com ZIEHE] 2. Do US citizens or Chinese citizens most likely supply Chinese yuan? * 1 point Explain. Your answer 3. Explain why the demand curve for yuan is downward-sloping. * 1 point Your answer 4. Explain why the supply curve is upward-sloping. * 1 point Your answer 5. Assume that the exchange rate for yuan was $5 dollars. Would this result * 1 point in a shortage or a surplus of yuan? Use the graph to explain your answer. Your answer 6. Assume that people in China wanted more American goods and services. * 1 point Show what would happen on the graph and identify if the yuan would appreciate or depreciate. Your answer [ A (w I ' @ docs.google.com 4.6 Mon # Olivia - oro T. LR AN e 3 @ Financia Your answer 6. Assume that people in China wanted more American goods and services. * 1 point Show what would happen on the graph and identify if the yuan would appreciate or depreciate. Your answer Part 2 - Graph It Part 2 Graph It Draw correctly labeled graphs of the foreign exchange market for both the U.S. dollar (USD) and the Canadian dollar (CAD) then answer the questions. Copyright Jacob Clifford 2020. www.ACDCecon.com Annual license required. Do not use unless you have purchased a license 7. Show what will happen on both graphs if Canadians prefer vacationing in * 1 point the US. Identify what will happen to the value of the USD and the value of the CAD. &, Add file Never submit passwords through Google Forms. This form was created inside of Loudoun County Public Schools. Report Abuse Google Forms [ A (w ' @ docs.google.com IR I LRV 3 p Olivia - Macro T.. Part 1 - Draw It Macro Topic 6.4 Effect of Policies on Exchange Rates Part 1 Draw It- For each of the following questions, show what happens on correctly labeled models of the foreign exchange market for US dollars (USD) and Canadian dollars (CAD). Copyright Jacob Clifford 2020. www ACDCecon.com Annual license required. Do not use unless you have purchased a license 1. US policymakers implement expansionary fiscal policy resulting inreal ~ * 1 point output increasing faster in the US than in Canada. Identify what happens to the value of each currency. &, Add file 2. The US central bank sells treasuries, increasing the U.S. real interest rate * 1 point relative to Canada''s. Identify what happens to the value of each currency. &, Add file 3. The U.S. puts tariffs on Canadian imports. Identify what happenstothe ~ * 1 point value of each currency. &, Add file @ Part 2 Putting It All Together ' @ docs.google.com @ == (@ PV = SRV YRR \\ Z 3 IR I 2. The US central bank sells treasuries, increasing the U.S. real interest rate * 1 point relative to Canada''s. Identify what happens to the value of each currency. & Add file 3. The U.S. puts tariffs on Canadian imports. Identify what happens to the ~ * 1 point value of each currency. & Add file Part 2 - Putting It All Together Part 2 Putting It All Together- Draw the foreign exchange market for US dollars and label the international value of the US dollar ER,. Copyright Jacob Clifford 2020. www.ACDCecon.com Annual license required. Do not use unless you have purchased a license 4. Assume that mismanagement in the US results in significantly higher * 1 point inflation. Show what will happen on the graph and identify what will happen to the international value of the dollar. &, Add file 5. Explain why higher inflation causes a shift in both the demand for dollars * 1 point and the supply of dollars. Uinhar inflatinn in tha 11 @ malbac Amarinan ar ' @ docs.google.com @ == (@ PV SRV R \\ Y e I Part 1 - Check Your Understanding Macro Topic 6.6 Real Interest Rates and Capital Flows Part 1 Check Your Understanding- Draw the foreign exchange market for US dollars and the international value of the US dollar ER,. = mics Worksheets- www.acdcecon.com Copyright Jacob Ciifford 2020. www.ACDCecon.com Annual license required. Do not use unless you have purchased a license 1. Assume that the real interest rate in the US increases relative to other * 1 point countries. Show what will happen on the graph and identify what will happen to the international value of the dollar. & Add file 2. Explain why an increase in the real interest rate causes a shift in both the * 1 point demand for dollars and the supply of dollars. Your answer 3. Would the increase in the real interest rate move the US capital and * 1 point financial account towards a surplus or towards a deficit? Explain. Your answer 0 ', @ docs.google.com 4.6 Mon LT #) Olivia - Macro T.. \\ E EHEUTE Part 2 Putting It All Together Part 2 Putting It All Together- Assume that there are only two countries, Econland and Macrostan. Draw a loanable funds graph for each country with the current real interest rate in Econland at 4% and the current real interest rate in Macrostan at 8% then answer the questions. 4. Show what will happen to the supply of loanable funds on each graph if ~* 1 point financial capital is free to move across countries. Identify what will happen to the real interest rate in each country. & Add file 5. Other things equal, explain why it is likely that the real interest rate in * 1 point each country would end up being the same. Your answer 6. Assume that the central bank of Macrostan increased the money supply. * 1 point What would happen to the Macrostan's net capital inflows in the short-run. Explain. Your answer Clear form