Year U.S. Dollar England Pound Russia Rubble France Euro 1. The table above show
ID: 2440810 • Letter: Y
Question
Year
U.S.
Dollar
England
Pound
Russia
Rubble
France
Euro
1. The table above shows exchange rates for selected currencies from 2012 through 2013.
a. Given the change in the value of the dollar between 2012 and 2013, as indicated in the table above, describe the effects this will have on United States tourism in these countries.
b. Explain what impact the change in the value of the dollar between 2012 and 2013 will have on the United States current account.
c. Explain how the change in the international value of the dollar between 2012 and 2013 will affect price level and output in the United States.
Exchange RatesYear
U.S.
Dollar
England
Pound
Russia
Rubble
France
Euro
1. The table above shows exchange rates for selected currencies from 2012 through 2013.
a. Given the change in the value of the dollar between 2012 and 2013, as indicated in the table above, describe the effects this will have on United States tourism in these countries.
b. Explain what impact the change in the value of the dollar between 2012 and 2013 will have on the United States current account.
c. Explain how the change in the international value of the dollar between 2012 and 2013 will affect price level and output in the United States.
Explanation / Answer
France Euro and Pound have appreciated w.r.t dollar. It means that more tourists would flock from these places to the US. Because their spending decreases.
Current account deficit would widen because of the depreciating dollar. Because US is basically an import dependent economy. More the depreciation, more the import bill and more the current acccount deficit.
Depreciation increases the exports and reduces the imports which would increase the output or aggregate demand which is also called GDP. This will increases the price level in the short term. Price level also increases becuase of the costly imports.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.