Each answer should be short. Do feel free to make your points, but make them concise and clear.
economics
Description
International Finance
·
Type
the answers on the word file.
· Each answer should be short. Do feel free to make your points, but make them concise and clear. The word limit for answering each sub-question is 180
Question
1:
Are the statements below true or false? (0.5 mark for each) Explain the reasons
for your answers.(1.5 marks for each)
- It is impossible for a country to run both current account surplus and capital account surplus in the same year. (2 marks)
- Suppose that the United States is on a bimetallic standard at $35 to one ounce of gold and $3 for one ounce of silver. If new silver mines open and flood the market with silver, the two metals will circulate as before in the US since citizens could exchange their gold currency for silver currency at any time. (2 marks)
Question
2: The
graph below is the exchange rate of Turkish Lira over US dollar (TRY/USD)
between January to September 2018. At the beginning of the year, the exchange
rate was 3.7776 lira per dollar. However, on 13th August Turkish
Lira jumped to 6.9025 lira per dollar, a historic high against the dollar.
- Was
it an appreciation or depreciation of Turkish Lira (TRY) in 2018?
Calculate the percentage change of TRY value when the exchange rate went
from 3.776 to 6.9025.
(1 marks)
- What were the main reasons for the dramatic change of TRY in 2018? (2 marks)
