Fixed Exchange Rate System

I want to make certain that I have completed these problems correctly. --- Refer to graph attached. 1. Starting at equilibrium income $50 billion, where (S - I)0 intersects (X - M) 0, suppose that worsening economic conditions abroad lead to an autonomous decrease in Australian exports of $5 billion. How much will Australian income be? What will Australia's trade account balance be? Explain your reasoning. 2. Starting at equilibrium income $50 billion, where (S - I) 0 intersects (X - M) 0, suppose that improving profit expectations lead to an autonomous increase in Australian investment of $5 billion. How much will Australian income be? What will Australia's trade account bal... click for more

Hypothetical Production Costs

I need to be certain that I have answered the problem correctly. --- Refer to attached graph. 1. Assuming that Toyota obtains all inputs from Japanese suppliers and that the yen/dollar exchange rate is 200 yen per dollar. What is the dollar-equivalent cost of a Toyota automobile? Show your work. 2. Assume that Toyota Inc. obtains all of its automobile inputs from Japanese suppliers. If the yen's exchange value appreciates from 200 yen = $1 to 100 yen = $1, what is the yen cost of a Toyota automobile? Show your work. 3. Assume that Toyota Inc. imports steel from U.S. suppliers, whose costs are denominated in dollars, while all other inputs are obtained from Japanese suppliers ... click for more

How do firm's prices its revenues and costs

How do firm's prices its revenues and costs. Give me an example

Balance of Payments

Assume that a nation faces a balance of payments deficit with high unemployment. What exchange-rate adjustment can be made to resolve these problems? What if the nation experiences a balance of payment surplus with inflation - what exchange-rate adjustment can be made to resolve this problem?

Floating Exchange Rates

Under a system of floating exchange rates, is a monetary policy or fiscal policy better suited for promoting internal balance? Why?