Currency 1-9 Problems

Currency Exchange Problems.

Graph the following problems using Panel 3 from your Big Graphs

1. The prices of U.S. goods rise relative to the prices of German goods.

2. Interest rates in the United States rise faster than interest rates in Canada.

3. French tourists flock to Mexico’s beaches.

4. Japanese video games become popular with U.S. children.

5. The U.S. government initiates a personal income tax reduction plan, leaving every tax-paying

American with more disposable income.                                                                                                 .            (A) What will happen as a result to trade between the United States and Taiwan?

6. Japan’s fiscal policies lead to an increase in Japan’s real GDP.

(A) What will happen as a result to trade between the United States and Japan?

7. The U.S. federal budget deficit increases, which causes the interest rate to rise. (Assume trade with Great Britain.)

(A) What will happen as a result to trade between the United States and Great Britain?

8. Europe’s interest rates are increasing, while the U.S. interest rate remains relatively constant.

(A) What will happen as a result to trade between the United States and Europe?

9. There is a rapid increase in the Canadian price level while the U.S. price level remains relatively constant.

(A) What will happen as a result to trade between the United States and Canada?