xplain the causes of the recent yen's depreciation based on Japan's balance of payments and differences in domestic and foreign interest rates. Also, express your opinion on the future direction of the yen-dollar exchange rate.
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Explain the causes of the recent yen's
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- In a floating exchange rate system: Question 15 options: The Balance of payments will always equal the government budget The Balance of Payments should always be in surplus The government intervenes to influence the exchange rate The exchange rate should adjust to equate the supply and demand of the currencyChapter 19 In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the demand for dollars?if we to use the monetary approach to exchange rate determination, what would be the predicted effect on the xchange rate of domestic currency if domestic real income increases
- Question- Discuss the evolution of international monetary system with the passage of time. How is Oman managing its exchange rate? In your view which exchange rate regime is beneficial for the countries and why?1.One proposal to stabilize the international monetary system involves setting exchange rates at their purchasing power parity rates. Once exchange rates are correctly aligned (according to PPP), each nation would adjust its monetary policy so as to maintain them. What problems might arise from using the PPP rate as a guide to the equilibrium exchange rate?Question 9 Explain with the aid of a numerical example using the yen per dollar exchange rate assuming a spot exchange rate of 120 yen per dollar, a Japanese interest rate of 0.5% and dollar interest rate of 7% what is meant by a “carry trade” in the foreign exchange market. Make clear the break-even exchange rate of the strategy and the profits/losses at different exchange rate parities. Explain the profit and loss in both yen and dollars of the actual exchange rate in one year's time of 100 yen per dollar or 140 yen per dollar. Also state the break-even exchange rate in one year’s time of the strategy.