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  • Worksheet Exchange Rate in Class BmXRHyscjD

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    Eesha Punjabi
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    The document discusses how four scenarios could impact the value of the US dollar: 1) High returns in East Asian investments attract foreign capital out of the US dollar, weakening it. 2) A US tariff on imports raises domestic automobile prices and inflation, weakening the dollar. 3) Improved quality of US goods increases demand for US exports and the dollar. 4) A better economic outlook in Europe increases demand for European exports and their currencies versus the US dollar.

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    The document discusses how four scenarios could impact the value of the US dollar: 1) High returns in East Asian investments attract foreign capital out of the US dollar, weakening it. 2) A US tariff on imports raises domestic automobile prices and inflation, weakening the dollar. 3) Improved quality of US goods increases demand for US exports and the dollar. 4) A better economic outlook in Europe increases demand for European exports and their currencies versus the US dollar.

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    8 views2 pages

    Worksheet Exchange Rate in Class BmXRHyscjD

    Uploaded by

    Eesha Punjabi
    The document discusses how four scenarios could impact the value of the US dollar: 1) High returns in East Asian investments attract foreign capital out of the US dollar, weakening it. 2) A US tariff on imports raises domestic automobile prices and inflation, weakening the dollar. 3) Improved quality of US goods increases demand for US exports and the dollar. 4) A better economic outlook in Europe increases demand for European exports and their currencies versus the US dollar.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

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    Section:

    (1) How would each of the following be likely to affect the value of the dollar, all else
    being equal? Explain. (Also, make diagrams in each case)
    (i) As East Asian economies recover, international financial investors become
    aware of many new, high-return investment opportunities in the region.

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    (ii) The U.S. government imposes a large tariff on imported automobiles.

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    1
    (iii) Quality of goods produced by United States improved in the current FY22.

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    (iv) Economic Outlook of European economies improved.

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