DP Economics Questionbank

Calculate the value of the Mexican peso (US$ per MX$) in 2015. Enter your result in Table 3.

Using Table 3, state one possible effect on Mexican consumers and one possible effect on Mexican producers from the change in the value of the Mexican peso (US$ per MX$) between 2014 and 2016.

Using information from Figure 5, sketch an exchange rate diagram to show how the change in Mexico’s spending on imports in 2010 would have affected its exchange rate (US$ per MX$), ceteris paribus.

Using an exchange rate diagram, explain how raising interest rates would “stop the fall in the peso’s value” (paragraph [4]).

Using an AD/AS diagram, explain how the peso’s weakness is “raising inflation” (paragraph [6]).

Using an exchange rate diagram, explain how the increase in the official interest rate to 3.5 % is likely to affect the value of the New Zealand dollar (paragraph [5]).

Define the term depreciation indicated in bold in the text (paragraph [4]).

Using an AD/AS diagram, explain how the falling value of the Ghanaian cedi may have contributed to inflation.

Assume that the dollar/yen exchange rate is in equilibrium. Using the functions, calculate the cost, in dollars, of a motorbike which costs ¥552 640.

Define the term depreciation indicated in bold in the text (paragraph [4]).

Using an exchange rate diagram, explain how higher interest rates could “protect the rupee from further depreciation” (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the possible economic consequences on the Indian economy of a depreciating rupee.

Using information from the text/data and your knowledge of economics, discuss the view that a depreciating currency is good for the Chinese economy.

Using an exchange rate diagram, explain why the “widening trade deficit in services” could lead to a depreciation of the renminbi (paragraph [3]).

Define the term depreciation indicated in bold in the text (paragraph 1).

Using an exchange rate diagram, explain why “slowing growth in China” may have caused a depreciation of the Australian dollar (paragraph 1).

Using information from the text/data and your knowledge of economics, discuss the possible consequences for the Australian economy of the fall in the value of the Australian dollar.

Using an AD/AS diagram, explain how the falling value of the Zambian kwacha (Zambia’s currency) is “feeding into inflation” (paragraph 6).

Using an exchange rate diagram, explain how “the need to import corn” will affect the value of the South African rand (paragraph [3]).

Define the term depreciation indicated in bold in the text (paragraph [6]).

Using an exchange rate diagram, explain how the central bank might depreciate the value of the rupee (paragraph [3]).

Explain two reasons why a government might prefer a floating exchange rate system for its currency.

Calculate the quantity of EU€ she will receive for her US$300 000.

Explain two possible economic consequences for the eurozone if the euro appreciates.

Calculate, in US$, the loss made by Tanya as a result of these transactions.

Using an exchange rate diagram, explain one reason for the appreciation of the Canadian dollar (paragraph [3]).

Calculate the equilibrium exchange rate for the US$ in terms of the gamma.

State two reasons that could have caused an increase in the supply of US$.

If a visitor to Gardia from the US buys a towel that costs 23 gamma, calculate the cost in US$.

Using information from the text/data and your knowledge of economics, discuss the possible effects on the Canadian economy of the strengthening of the Canadian dollar against the US dollar.

Calculate the additional cost of paying back the loan in gamma in 2019, due to the interest and the change in the exchange rate.

Using an exchange rate diagram, explain what is likely to have happened to the Turkish lira when Turkish citizens “bought US$1 billion worth of foreign currency” (paragraph [5]).

Using Figure 2, calculate how many US$ are needed to buy one gamma at the new exchange rate.

Define the term depreciation indicated in bold in the text (paragraph [3]).