Economics Homework Help

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• Use xe.com (Links to an external site.) determine the following:
  • The $US price of a £25,000 British (UK) Mini Cooper
  • The South African Rand price of a $300 U.S. Ipad
  • The Euro price of a ¥50,000 Japanese Aibo (electronic dog)
  • The Mexican peso price of a 45,000 Indian Rupee carpet
  • Has the Mexican peso appreciated against the $US in the last year?

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• Assume Tesla makes ¥120,000,000 in profits one month selling cars in Japan. In that same month, the exchange rate moves from 120 ¥/$ to 100 ¥/$. Does this help or hurt Tesla’s profits and by how much? What lesson can be drawn from exchange rate depreciation for firms that earn substantial overseas profit?

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Use Google Drawings (Links to an external site.) to graph show the impact of these events (or just do it on a piece of paper). Also note how this would be shown in the US balance of payments.

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Do you want a review? If so, here you go:

https://www.youtube.com/watch?v=D41EuDh3epI

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• Unemployment increases in Mexico (which decreases spending power)
• US inflation (pus) > Mexico inflation (pm)
• Mexican Central Bank increases interest rates
• The number of Mexican citizens working in the US (and sending money home) increases

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Requirements: | .doc file