which of the following are short-term drive of currency valuation? a. surprise changes in interest rates, inflation, and trade b. surprise changes in interest rates, inflation, and gold c. surprise changes in relative prices, trade, and gold d. surprise changes in relative prices, inflation, and trade
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- Supposeyouhave$200,000inabanktermaccount.Youearn5%interestper annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%. Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses.1. Supposeyouhave$200,000inabanktermaccount.Youearn5%interestper annum from this account.You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses.2. TheAustralianBureauofStatistics(ABS)reportedinMay2017thatthecivilian population in Australia over 15 years of age was 20.8 million.Of this population of 20.8 million Australians, 13.5 million were employed and 0.7 million were unemployed.Calculate Australia’s labor force and the number of people in the civilian population who were not in the labor force? Also, with examples examine the causes of structural unemployment in Australia.Assume that the Fed is believed to cut discount rate in the near future. A speculative investor is likely to OA Sell; Buy the government bonds now then them in the near future. B. Buy; Sell Oc Buy; Buy D. Sell; Sell
- Suppose a given country experienced low and stableinflation rates for quite some time, but then inflation picked up and over the past decade had beenrelatively high and quite unpredictable. Explain howthis new inflationary environment would affect thedemand for money according to portfolio theories ofmoney demand. What would happen if the governmentdecided to issue inflation-protected securities?Apart from risk component, several marcoeconomics factors such as federal reserve (the fed ) policy, federal budget deficit or surplus, international factors and level of business activity- influence interest rate. A. the changes in value of foreign currency affect business operation and the value of investment asset in that currency. if the value of the foreign currency increases relative to the home currency, invest asset will lose value. TRUE OR FALSE? B. if the Feds inject a huge amount of money into the market, inflation is expected to decline and longterm interest rate are expected to rise. TRUE OR FALSE? C. When the Feds increases the money supply, short term interest rates tend to decline. TRUE OR FALSE? D. When the economy is weakening, the feds is likely to decrease in short term interest rate. TRUE OR FALSE?Money demand is likely to increase the most during which part of the business cycle? A. recession B. trough Ос. рeak O D. contraction O E. recovery
- Suppose that a borrower and a lender agree on thenominal interest rate to be paid on a loan. Theninflation turns out to be higher than they bothexpected.a. Is the real interest rate on this loan higher or lowerthan expected?b. Does the lender gain or lose from thisunexpectedly high inflation? Does the borrowergain or lose?c. Inflation during the 1970s was much higher thanmost people had expected when the decade began.How did this unexpectedly high inflation affecthomeowners who obtained fixed-rate mortgagesduring the 1960s? How did it affect the banks thatlent the moneyThe _demand for money arises from the need to hold money as a medium of exchange. This demand for money is a function of Select one: a. transaction; interest rates O b. precautionary; national income O c. transaction; national income O d. speculative; interest ratesThe accompanying graph represents the market for loanable funds in the hypothetical country of Bunko. Assume the market is initially in equilibrium and inflation expectations are 2%. a. Adjust the graph to demonstrate the effects of inflation expectations increasing from 2% to 4%. b. What is the real interest rate after the change in inflation expectations? 5% 3% 2% 7% c. Which effect below characterizes the relationshin shoud Farars Interest rate (%) 10 9 8 7 6 5 4 3 2 1 0 0 2 Market for Loanable Funds Scroll 4 6 8 10 12 14 16 Quantity of loanable funds (billions of $) 18 20
- Explain how global volatility can worsen South African economyfurther.Quantitative easing can be described as A, B, C OR D ONE ANSWER A the purchase of long-term government and private mortgage backed securities by central banks to make credit available so as to stimulate aggregate demand. B the purchase of long-term government and private mortgage backed securities by central banks to make credit less available so as to stimulate aggregate demand. C the buy back long-term government and private mortgage backed securities by central banks to make credit available so as to decrease aggregate demand. D the buy back long-term government and private mortgage backed securities by central banks to make credit less available so as to decrease aggregate demand.When the Central Bank ________ interest rates, bond prices ________. Select one: a. raises; remain the same b. lowers; remain the same c. raises; rise d. lowers; rise
