Macroeconomics Analysis Chapter 5 Questions

1. Show the effect of dollar appreciation and depreciation with the euro on the price of U.S. exports and imports by updating Table 15.2, as shown in the updated table.

TQ 3. If the U.S. economy is operating near full employment and the exchange rate increases (the dollar appreciates), explains why the Federal Reserve will be less inclined to raise interest rates

AQ 3. Based on the discussion in this chapter, update the controversy over the value of the Chinese yuan in foreign currency markets. Is China still using central bank foreign exchange policy to maintain the value of the yuan? What is the current policy of the United States on this issue?

Q4. The U.S. has historically low interest rates at present. How would you predict these would impact the value of the dollar on foreign exchange markets? How, in turn, would these low interest rates impact our balance of trade? Explain your answers.

Q5. Why would nations favor fixed vs. floating exchange rates for their currencies? Why do some developing nations have a “fear of the float?"

Q7. Identify the three most significant economic problems we currently confront. Also, identify the role monetary policy could play (if any) in resolving these problems.