Question
What are the four fundamental determinants of a country's exchange rate and what is likely to happen to the exchange rate of each currency in
What are the four fundamental determinants of a country's exchange rate and what is likely to happen to the exchange rate of each currency in the following cases?
(1) A fall in the U.S. interest rate relative to interest rates in Germany, what happens to USD? Why?
(2) A higher inflation rate in United Kingdom compared to Canada (what is the impact to the UK dollar). Why?
(3) A severe recession in Europe (euro) when the US has no recession. Why?
(4) Trump imposed tariffs on Chinese goods (25%), assume china did not retaliate. What happens to USD in comparison to Chinese yuan. Why?
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Principles of Macroeconomics
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster
12th edition
134078802, 978-0134078809
