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ECON 102 Lecture 11: Short and Long Run of Aggregate Supply)

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cerisegiraffe538
27 Oct 2014
School
UBC
Department
Economics
Course
ECON 102
Professor
Nisha Malhotra

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ECON 102 Full Course Notes
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Document Summary

Econ 102 - principles of macroeconomics - chapter 26 (lecture 11): short and long run of aggregate supply. Since it will be more expensive to buy canadian goods after rates increases, exports decrease. Since canadian dollars are worth more, it is cheaper to buy foreign goods, and imports increase. The graph showing the relationship between exchange rates and imports/exports. This graph is similar to supply and demand function. Meaning that demand is a function of price. When something other than the price changes, it means the function has been affected. Say one draws the relationship between gpa and number of hours spent studying. The result would be similar to production function. If coffee is added, the function shifts up. If there is a party going on next door, or if one"s cell phone is on, the function shifts down. If the number of hours spent studying increases, there is a movement along the.

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Related Questions

. (TCO E and I) Let the exchange rate be defined as the number of dollars per Japanese yen. Assume that there is a decrease in U.S. interest rates relative to that of Japan.

(a.) (10 points) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the yen? Why?

(b.) (10 points) Has the dollar appreciated or depreciated in value relative to the yen?

(c.) (10 points) Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Japan? Illustrate by showing the price of a U.S. e-reader in Japan before and after the change in the exchange rate.

(d.) (10 points) If you had a business exporting goods to Japan, and U.S. interest rates fell as they have in this example, would you plan to expand production or cut back? Why? (Points : 40)

Let the exchange rate be defined as the number of dollars per British pound. Assume there is a relatively lower rate of inflation in the U.S. relative to that of Britain.

(a.) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the pound? Why?

(b.) Has the dollar appreciated or depreciated relative to the pound?

(c.) Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in GreatBritain? Illustrate by showing the price of a U.S. cell phone in Britain, before and after the change in the exchange rate.

(d.) If you had a business exporting goods to Britain, and U.S.inflation fell as discussed above in this example, would you plan to expand production or cut back? Why?

TCOs E and I) Let the exchange rate be defined as the number of dollars per Japanese yen. Assume that there is a relatively lower rate of inflation in the U.S. relative to that of Japan.

(a.) (10 points) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the yen? Why?

(b.) (10 points) Has the dollar appreciated or depreciated in value relative to the yen?

(c.) (10 points) Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Japan? Illustrate by showing the price of a U.S. e-reader in Japan, before and after the change in the exchange rate.

(d.) (10 points) If you had a business exporting goods to Japan, and U.S. inflation fell as discussed above in this example, would you plan to expand production or cut back? Why? (Points : 40)