Explain the attached questions below.
vi payments accounts, still PLEsuit IsOnly foreign currency traded with the Canadian dollar. 7. For each of the following situations, outline the effect on the price of the Canadian dollar in terms of US dollars and draw a demand and supply graph that illustrates the changes that occur in the foreign exchange market for the Canadian dollar. . A contractionary monetary policy initiated by the Bank of Canada raises Canadian interest rates. b. Canada's real output rises at a time when real output in the United States is falling. c. Americans (but not Canadians) find Canada a more attractive place to make financial investments. d. Given Canada's aging population, more Canadian "snowbirds" travel to the United States each winter. e. Due to a credit crisis that affects US financial institutions more than it does Canadian ones, Canada's attractiveness as a destination for direct and portfolio investment increases. f. The Bank of Canada initiates an expansionary monetary policy that reduces Canadian interest rates.1. Towards the end of the 20th century, the U.S. government wanted to save money by closing a small portion of its domestic military installations. While many people agreed that saving money was a desirable goal, people in areas potentially affected by a closing soon reacted negatively. Congress finally selected a panel whose task was to develop a list of installations to close, with the legislation specifying that Congress could not alter the list. Since the goal was to save money, why was this problem so hard to solve? 2. Your car gets 29 miles per gallon (mpg) at 60 miles per hour (mph) and 25 mpg a 70 mph. At what speed should you make a 525-mile trip: a. If gas costs $3 per gallon and your time is worth $18 per hour b. If gas costs $4 per gallon and your time is worth $12 per hour C. If gas costs $5 per gallon and your time is worth $9 per hour 3. A firm is planning to manufacture a new product. As the selling price is increased, the quantity that can be sold decreases. Numerically the sales department estimates: P = $475-0.250 Where P = selling price per unit and Q = quantity sold On the other hand, management estimates that the average unit cost of manufacturing and selling the product will decrease as the quantity sold increases. They estimate C = $480 + $22,500 Where C = cost to produce and sell Q per year The firm's management wishes to maximize profit. What quantity should be sold? How much profit will be made?QUESTION 48 Consider three items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) the purchase of newly constructed houses and (3) the rental of an apartment. How are these three items accounted for when GDP is calculated? All three items are included in the consumption component of GDP. Item (1) and item (3) are included in the consumption component of GDP, while item (2) is included in the investment component of GDP. G Items (1) and (2) are included in the investment component of GDP, while item (3) is included in the consumption component of GDP. Item (2) Is included in the investment component of GDP and item (3) is included in the consumption component of GOP, Item (1) is not included in GOP at all because it is considered a used good. QUESTION 49 How is the real rate of interest determined? The real interest rate is set by the central bank of a nation, such as our Federal Reserve. The real interest rate is determined by the equilibrium of the supply and demand for loanable funds. The real interest rate is determined by the nominal interest rate plus the inflation rate. The real interest rate is determined by the demand for private savings and the supply of public savings. QUESTION 50 Which of the following occurs when the Ford Motor Company removes a 2020 Ford Taurus from inventory and sells it to an American household for $22.000? U.5. consumption increases by $22,000, U.5. investment decreases by $22,000, and U.S. GDP does not change. U.5. consumption increases by $22,000, U.S. investment does not change, and U.S. GDP Increases by $22.000. U.S. consumption does not change, U.S. investment decreases by $22,000, and U.S. GDP decreases by $22,000. U.5. consumption increases by $22.000, U.5. investment increases by $22,000, and U.S. GDP increases by $44,000
