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Naya [18.7K]
2 years ago
12

Flexible exchange rates and responses to changes in foreign macroeconomic policy. Suppose there is an expansionary fiscal policy

in the foreign country that increases Y*, and at the same time the foreign central bank raises i* .
(a) In an IS-LM-IP diagram (IP for the interest parity relation), show the effects of the increase in foreign output Y* and the increase in the foreign interest rate i* , on domestic domestic output Y and the exchange rate (E), when the domestic central bank leaves the policy interest rate unchanged. Briefly explain in words.
(b) In an IS-LM-IP diagram, show the effects of the increase in Y* and the increase in i* on the domestic output (Y ) and the exchange rate (E), when the domestic central bank matches the increase in the foreign interest rate with an equal increase in the do-mestic interest rate. Briefly explain in words
(c) In an IS-LM-IP diagram, show the required domestic monetary policy following the increase in Y* and the increase in i* , if the goal of domestic monetary policy is to leave domestic output Y unchanged. Briefly explain in words. When might such a policy be necessary?
Business
1 answer:
bogdanovich [222]2 years ago
6 0

Answer:

The answer is letter C.

Explanation:

In an IS-LM-IP diagram, show the required domestic monetary policy following the increase in Y* and the increase in i* , if the goal of domestic monetary policy is to leave domestic output Y unchanged. Briefly explain in words. When might such a policy be necessary?

IS-LM-BP-Model was formulated by Mundell and Fleming. They were both economists and they created two kinds of  analysis in the IS-LM-BP model according to the exchange rate regimes fixed or flexible. Point above/ below the BP curve is trade surplus/ deficit.

Foreign central bank rases i, interest rate differential reduces, exchange rate depreciates, trade balance improves, IS shifts rightwards, point above BP curve, so ,income rises because of expansionary fiscal policy also, excess demand for money , interest rate, rises, investiment decreases, income decreases.

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Value-added" describes the economic enhancement a company gives its products or services and helps explain why companies are abl
Eduardwww [97]

Answer:

What Is Value-Added?

The term "value-added" describes the economic enhancement a company gives its products or services before offering them to customers. Value-added helps explain why companies are able to sell their goods or services for more than they cost to produce. Adding value to products and services is very important as it provides consumers with an incentive to make purchases, thus increasing a company's revenue and bottom line.

Explanation:

3 0
2 years ago
Hommie Delicacies produces two products (Orapine and Banango) from a joint process. The joint cost of production is GH¢80,000. F
SVEN [57.7K]

Answer:

Explanation:

Joint cost = 80,000

Orapine

cost of 5000 at 20 = 100,000

Incremental Cost of further processing =20,000

Incremental revenue = 5000* (25-20)= 25,000

Incremental income                                   5,000

Banango

cost of 10000 at 15 = 150,000

Incremental cost of further processing =  20,000

Incremental revenue = 10,000*(16-15) = 10,000

Incremental income = (10,000) loss

If  Orapine is processed further , there will be an incremental income of 5,000 compared to Banango that will bring an incremental loss of 10,00 if processed further.

Based on this , it is advised that Orapine be processed further while Banango is not

3 0
3 years ago
Bob is a manager at a local toyota dealership who has lost five of his employees during the last year. now he has to make a deci
Roman55 [17]

The problem that Bob will most likely face in terms of evaluation and feedback step in the decision making process is when Bob’s gathered information may be neglected when the plan that he has done has been a success or it has been a failure.

3 0
3 years ago
Amy is concerned with her​ organization's inability to solve problems quickly. She believes that more people should be included
Licemer1 [7]

Answer: Amy is <em>concerned </em>with her​ organization's i<em>nability to solve problems</em> quickly. Several <u>subordinates have complained</u> to her that they feel alienated from the management <u>making the decisions</u> about their jobs with<u> no input </u>from them.

The element that Amy should address is the Chain of command.

Explanation:

A chain of command is a system for sending inside information of organizations with strong, vertical and authoritative structures.

The continuous flow of the chain of command clearly establishes the authority, revealing this depending on who reports to whom.

We must take into account the Authority and the Unit of command. This last is very important because it states that each supervisor must inform only one superior and like this the company preserves the continuous line of authority so all employees are heard and their ideas are taken into consideration for making decisions.  

3 0
3 years ago
According to the simple monetary model, if money is growing at 5% in the United States and 6% in the United Kingdom, while real
Murrr4er [49]

Answer:

A)

Since the money supply is growing at a much faster rate than real GDP in the US, this means that the inflation rate in the US will be higher than the inflation rate in the UK. In both countries the money supply is growing at a faster rate, but the difference in the US is larger (money supply is growing 67% faster that real GDP), while the money supply in the UK is growing 20% faster than real GDP.  

This means that the US dollar should depreciate against the British pound.

B)

If you have US dollars, then you should increase your investments in the UK because the pound will be worth more US dollars in the future.

C)

More American goods should be exported to the UK, and less British goods should be imported to the US. Since the US dollar should be cheaper, American products are cheaper. The opposite will happen to British products.

7 0
2 years ago
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