What do reports that the dollar is "undervalued" mean? How will foreign exchange markets respond to this information? Support your answer graphically
What will be an ideal response?
If the dollar is "undervalued," that means that the current exchange rate (foreign currency per dollar) is less than the relative purchasing power of the dollar. This implies that currency traders will increase their holdings of dollars (the supply curve for dollars will shift to the left) and decrease their holdings of other currencies against which the dollar is "undervalued." As the supply of dollars decreases, the exchange rate will rise. The exchange rate will continue to rise until the dollar's value accurately reflects its relative purchasing power.
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According to the 1974 Constitution of the former Yugoslavia, nobody in Yugoslavia owns resources. Being a socialist country, the constitution claimed resources were owned by "society" as a whole. According to the economic way of thinking,
A) their economic problem would be solved. B) resources would finally be used efficiently, because the profit motive would be destroyed. C) people would use Yugoslavia's resources wastefully because they themselves wouldn't have to pay the opportunity cost. D) the central planners would know how to calculate the true values and costs of resource use.
Refer to the information below. Based on cost-benefit analysis, Normal University should undertake Level:
Answer the question based on the following information. Normal University has found it necessary to institute a crime-control program on its campus to deal with the high costs of theft and vandalism. The university is now considering several alternative levels of crime control. This table shows the expected annual costs and benefits of these alternatives.
A. Two
B. Three
C. Four
D. Five