Make two different graphs Sketch a graph that demonstrates the demand and supply for US dollars...

Make two different graphs

Sketch a graph that demonstrates the demand and supply for US dollars against the Canadian dollar. Label the initial equilibrium exchange rate and quantity of dollars.

On the graph, clearly demonstrate (shift the correct curve(s)) what happens to the exchange rate when the US has a higher inflation rate than Canada. Explain why you have drawn the change as you have.

Sketch a graph that demonstrates the demand and supply for the South Korean won against the US dollar. Label the initial equilibrium exchange rate and quantity of won.

On the graph, clearly demonstrate (shift the correct curve(s)) what happens to the exchange rate when strong growth is expected by firms in South Korea. Explain why you have drawn the change as you have.

Expert Solution

(a) When US has higher inflation rate that Canada, US-made exportable goods become costlier and Canadian goods become cheaper, therefore US export demand falls and import demand (for Canadian goods) rises, which decreases the demand for US dollars, shifting the US-dollar demand curve leftward, lowering the exchange rate.

In following graph, exchange rate (P) and quantity of US dollars (Q) are measured vertically and horizontally respectively. D0 and S0 are initial demand and supply curve for US dollars, intersecting at point A with initial exchange rate P0 and quantity of US dollars Q0. As demand for US dollars falls, D0 shifts left to D1, intersecting S0 at point B with lower exchange rate P1 and lower quantity of US dollars Q1.

(b) When strong growth is expected in S.Korea, aggregate demand rises faster than aggregate supply in S. Korea, increasing import demand. This increases the demand for US dollars and decreases the demand for S.Korean Won, shifting the demand curve for Won leftward, lowering the exchange rate.

In following graph, exchange rate (P) and quantity of Won (Q) are measured vertically and horizontally respectively. D0 and S0 are initial demand and supply curve for Won, intersecting at point A with initial exchange rate P0 and quantity of Won Q0. As demand for Won falls, D0 shifts left to D1, intersecting S0 at point B with lower exchange rate P1 and lower quantity of Won Q1.

Rahul Sunny answered 2 years ago

Q1.Graph the demand for and supply of Australian dollars for US dollars. Label each axis. From...

Q1.Graph the demand for and supply of Australian dollars for US dollars. Label each axis. From Australia's perspective, show graphically and explain the effect on the Australian dollar of the following. Australia’s major trading partners experience higher RGDP and income growth resulting in an increase in the price of Australian exported commodities (e.g. coal, iron-ore). Additionally: - there is increased speculation of the Australian dollar (AUD) based on speculators expectations of its future value. - Lower interest rates in Australia...

Draw two money market graphs ( money supply & money demand) that demonstrates how the Fed...

Draw two money market graphs ( money supply & money demand) that demonstrates how the Fed closes the inflationary gap, and also a recessionary gap.

Using the principles of supply and demand, sketch an appropriate supply and demand graph, labeling all...

Using the principles of supply and demand, sketch an appropriate supply and demand graph, labeling all the lines, and use it to tell me why increasing the money supply causes interest rates to fall.

Draw a supply and demand graph of the following scenarios. Use these graphs to answer what...

Draw a supply and demand graph of the following scenarios. Use these graphs to answer what happens to price and quantity? (Does is increase or decrease?) Must show graphs and answer what happens to price and quantity. a. (5 points) Cheese Market: Suppose that a technological advancement substantially reduces the cost of producing cheese, while a new study suggests that excessive use of cheese is harmful to a person’s health. b. (5 points) Cream Market: Peaches and cream are complements....

1. Sketch a graph of the market for peanut butter, labeling the supply and demand curves,...

1. Sketch a graph of the market for peanut butter, labeling the supply and demand curves, both axes, and the equilibrium price and equilibrium quantity. Now, a per-unit tax is imposed on sellers in this market. SHOW and describe what happens in this market. Draw and label any curve shifting and any change in the equilibrium price or equilibrium quantity. What is the new price that buyers pay for peanut butter? What is the price that sellers get to keep...

Draw the aggregate demand and aggregate supply graphs in a three-panel model: In the first graph,...

Draw the aggregate demand and aggregate supply graphs in a three-panel model: In the first graph, show aggregate demand on the graph and aggregate supply in the immediate short run. In the second graph, again show aggregate demand, but this time show aggregate supply in the short run. Finally, in the last panel, show aggregate demand and aggregate supply in the long-run. Be sure to label each axis and each curve in each graph Discuss the following by referring to...

Graph the demand for and supply of Australian dollars for euros and label each axis. Show...

Graph the demand for and supply of Australian dollars for euros and label each axis. Show graphically and explain the effect of an increase in Australian government budget deficits that increase Australian interest rates on the demand for and supply of dollars and the resulting change in the exchange rate of euros for Australian dollars. Why might the change in the exchange rate lead to an increase in Australia’s current account deficit?

3. Draw completely labeled Supply or Demand graphs. Draw a separate graph for each question. Answer...

3. Draw completely labeled Supply or Demand graphs. Draw a separate graph for each question. Answer the following questions by showing which way which curve moves: a. What happens to YOUR demand curve for macaroni and cheese after you graduate and get a better paying job? b. When the price of olive oil goes up, what probably happens to the demand for corn oil? c. When the price of petroleum goes up, what probably happens to the demand for natural...

Demand and Supply Graph each question separately. Make sure to start with equilibrium and then shift...

Demand and Supply Graph each question separately. Make sure to start with equilibrium and then shift the supply or demand curve to answer the question. Using the information bellow, Draw the Demand and supply Curves for Candy Bars to find the initial equilibrium price and quantity. Demand P Q Pt. $1.25 1 A $100 2 B $0.75 3 C $0.50 4 D $0.25 5 E Supply P Q Pt....

Draw a supply and demand graph for gasoline. Consider whether supply or demand for gasoline is...

Draw a supply and demand graph for gasoline. Consider whether supply or demand for gasoline is more inelastic, and draw the curves accordingly. Label the original equilibrium price $3. In California, the federal, state and local excise and sales taxes total about 77 cents per gallon. Assuming the government taxes the seller directly, draw the impact of this tax on the supply and demand diagram. Label the new price the consumer pays (Pc), the price the seller receives after taxes...

Question