Note: There are 5 bonus questions cach worth 2 points. Question 26 (honus I)x: H

Question

Note: There are 5 bonus questions cach worth 2 points. Question 26 (honus I)x: Holding all cse eqeal if the demand for U.S products increases in Gireat Britain then a) U.S exports to Gireat Brizain would decrease leading to an increase in denmand of the USD and the USD would appreciate relative to the GBP b) U.S, exports to Great Britain would increase, this would lcad to an increase in demand of the USD and the USD would appreciate relative to the GBP c) US exports to Gireat Britain would decrease leading to a decrease in the demand of the USD and the USD would likely depreciate relative to the GBP exports ko Cineat Britain would increase and this would cause the USD to depreciate relative to the GBP ion (RPPP): If Question 27 (Bomus 2): According to the Relative Purchasing Power Parity Condit the inflation rate between time-o and time-1 is 5% in Great Britain and 2% in the US, the pound should... a) depreciate by 3.77% relative to the USD b) appreciate by 3.77% relative to the USD e) depreciate by 2.86% relative to the USD d) appreciate by 2.86% relative to the USD Use the following information to answer ustionismus xosD/EUR = 1.21; rusD = 3%; Question 28 (Bonus 3): Which of the following two statements is correct? Statement A: According to the UIRP the short-run intrinsic value of the EUR is 1.12 Statement B: According to the UIRP the USD is currently overvalued relative to the EUR. a) Statement A is correct b) Statement B is correct c) Both statements are correct d) Both statements are wrong

Explanation / Answer

26) The answer is B -) U.S exports to Great Britain will increase , this would lead to an increase in the demand for the USD and USD would appreciated relative to GBP.

because, when the demand for U.S product increase in Great Britain,the great britain would increase imports and in same way, U.S exports will increase. to import from U.S , there is an increase the demand for U.S dollar by Great Britain members and the value of dollar will appreciate relative to GBP.

27) please uplaod it again. it against chegg policy

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