Illustrate the effect on the AUD by shifting one or both curves in the following graph

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Review the news article by Vanessa Desloires and answer the following questions.

Review the news article by Vanessa Desloires and answer the following questions.

Question

Review the news article by
Vanessa Desloires and answer the following questions.

.smh.com.au/business/markets/currencies/australian-dollar-hits-sixyear-low-on-china-fears-20150901-gjczj9.html”>http://www.smh.com.au/business/markets/currencies/australian-dollar-hits-sixyear-low-on-china-fears-20150901-gjczj9.html

1.
The article by Vanessa Desloires
suggests that the AUD is lower as a result of a more pessimistic outlook for
the Chinese economy. What is the most likely explanation?

A. World
oil prices have fallen
B. The
AUD is a commodity currency, and the demand for input commodities has fallen
C. The
Chinese Central Bank has raised interest rates, decreasing Ko to Australia
and increasing Ki to China
D. The
Chinese Central Bank has lowered interest rates, increasing Ko to Australia
and decreasing Ki to China
2. The demand for AUD is generated by:
A. Australian
imports of foreign output
B. Foreign
imports of Australian output
C. Central
bank sales of AUD
D. Australians
buying US government bonds
3. The supply of AUD is generated by:
A. Chinese
purchases of Australian minerals
B. Dividends
paid by US companies to their Australian shareholders
C. Japanese
imports of Australian beef
D. Australian
purchases of shares in European companies
4.
In the AD equation, X is measured by:
A. The
total volume or quantity of exports
B. The
total value of exports
C. None
of the above
D. A
and B
5. According to the article by Vanessa Desloires, “The Aussie slid more than
1 per cent against the greenback [USD] on Tuesday night amid tumultuous
global markets and a general sell-off in commodity-linked currencies.” Since the
AUD has depreciated, foreigners will import, ceteris paribus:
A. A
higher value of Australia’s goods and services
B. A
lower value of Australia’s goods and services
C. The
same value of Australia’s goods and services
D. There
is insufficient information to give an answer
6.
Suppose India follows China and accelerates its
industrialisation. For India, this will:
A. Decrease
imports and raise net exports
B. Increase
imports and lower net exports
C. Increase
imports and increase domestic investment
D. Decrease
imports and decrease domestic investment
7.
Suppose India follows China and accelerates its
industrialisation. For Australia, this will:
A. Decrease
exports and decrease net exports
B. Increase
exports and increase net exports
C. Increase
exports and decrease domestic investment
D. Decrease
exports and increase domestic investment
8.
Suppose the foreign exchange market is initially in
equilibrium. Suppose also that foreigners then increase their demand for
Australian goods and services by AUD 100 million (an exogenous change). The
final increase in demand for Australian goods and services by foreigners
will:
A. Be
higher than AUD 100 million due to the appreciation of the AUD
B. Remain
unchanged at AUD 100 million
C. Be
lower than AUD 100 million due to the appreciation of the AUD
D. Be
higher than AUD 100 million due to the depreciation of the AUD
9. If the AUD appreciates, then the
value of Australia’s imports will RISE if the price elasticity of demand for
Australian goods and services is:
A. Less
than one
B. More
than one
C. Equal
to one
D. All
of the above
10.
According to the article by Vanessa Desloires, Australia’s
exchange rate has been affected by a variety of global factors. This is
because Australia uses a floating exchange rate. Supposing that Australia
enters a recession, Australian interest rates are lowered, so causing Ki into
Australia to fall. The AUD exchange rate can assist the Australian economy’s
recovery from the recession by:
A. Depreciating
and reducing the balance of trade
B. Depreciating
and increasing the balance of trade
C. Appreciating
and reducing the balance of trade
D. Appreciating
and increasing the balance of trade

11. Suppose that the profitability of Australian companies falls
and share prices on the Australian stock exchange drop significantly (instead
of the Chinese stock market).

Review the news article by Vanessa Desloires and answer the following questions.

Review the news article by Vanessa Desloires and answer the following questions.

Question

Review the news article by
Vanessa Desloires and answer the following questions.

.smh.com.au/business/markets/currencies/australian-dollar-hits-sixyear-low-on-china-fears-20150901-gjczj9.html”>http://www.smh.com.au/business/markets/currencies/australian-dollar-hits-sixyear-low-on-china-fears-20150901-gjczj9.html

1.
The article by Vanessa Desloires
suggests that the AUD is lower as a result of a more pessimistic outlook for
the Chinese economy. What is the most likely explanation?

A. World
oil prices have fallen
B. The
AUD is a commodity currency, and the demand for input commodities has fallen
C. The
Chinese Central Bank has raised interest rates, decreasing Ko to Australia
and increasing Ki to China
D. The
Chinese Central Bank has lowered interest rates, increasing Ko to Australia
and decreasing Ki to China
2. The demand for AUD is generated by:
A. Australian
imports of foreign output
B. Foreign
imports of Australian output
C. Central
bank sales of AUD
D. Australians
buying US government bonds
3. The supply of AUD is generated by:
A. Chinese
purchases of Australian minerals
B. Dividends
paid by US companies to their Australian shareholders
C. Japanese
imports of Australian beef
D. Australian
purchases of shares in European companies
4.
In the AD equation, X is measured by:
A. The
total volume or quantity of exports
B. The
total value of exports
C. None
of the above
D. A
and B
5. According to the article by Vanessa Desloires, “The Aussie slid more than
1 per cent against the greenback [USD] on Tuesday night amid tumultuous
global markets and a general sell-off in commodity-linked currencies.” Since the
AUD has depreciated, foreigners will import, ceteris paribus:
A. A
higher value of Australia’s goods and services
B. A
lower value of Australia’s goods and services
C. The
same value of Australia’s goods and services
D. There
is insufficient information to give an answer
6.
Suppose India follows China and accelerates its
industrialisation. For India, this will:
A. Decrease
imports and raise net exports
B. Increase
imports and lower net exports
C. Increase
imports and increase domestic investment
D. Decrease
imports and decrease domestic investment
7.
Suppose India follows China and accelerates its
industrialisation. For Australia, this will:
A. Decrease
exports and decrease net exports
B. Increase
exports and increase net exports
C. Increase
exports and decrease domestic investment
D. Decrease
exports and increase domestic investment
8.
Suppose the foreign exchange market is initially in
equilibrium. Suppose also that foreigners then increase their demand for
Australian goods and services by AUD 100 million (an exogenous change). The
final increase in demand for Australian goods and services by foreigners
will:
A. Be
higher than AUD 100 million due to the appreciation of the AUD
B. Remain
unchanged at AUD 100 million
C. Be
lower than AUD 100 million due to the appreciation of the AUD
D. Be
higher than AUD 100 million due to the depreciation of the AUD
9. If the AUD appreciates, then the
value of Australia’s imports will RISE if the price elasticity of demand for
Australian goods and services is:
A. Less
than one
B. More
than one
C. Equal
to one
D. All
of the above
10.
According to the article by Vanessa Desloires, Australia’s
exchange rate has been affected by a variety of global factors. This is
because Australia uses a floating exchange rate. Supposing that Australia
enters a recession, Australian interest rates are lowered, so causing Ki into
Australia to fall. The AUD exchange rate can assist the Australian economy’s
recovery from the recession by:
A. Depreciating
and reducing the balance of trade
B. Depreciating
and increasing the balance of trade
C. Appreciating
and reducing the balance of trade
D. Appreciating
and increasing the balance of trade

11. Suppose that the profitability of Australian companies falls
and share prices on the Australian stock exchange drop significantly (instead
of the Chinese stock market). Illustrate the effect on the AUD by shifting one
or both curves in the following graph. (explain if both the supply/demand
curve would shift to the right or left
or stay the same)

.0/msohtmlclip1/01/clip_image001.png” alt=”Description: /users/mariamabo-elhoda/desktop/screen shot 2015-11-02 at 4.30.59 pm.png”>

Review the news article by Vanessa Desloires and answer the following questions.

. (explain if both the supply/demand
curve would shift to the right or left
or stay the same)

.0/msohtmlclip1/01/clip_image001.png” alt=”Description: /users/mariamabo-elhoda/desktop/screen shot 2015-11-02 at 4.30.59 pm.png”>

Review the news article by Vanessa Desloires and answer the following questions.

 

. .

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