The diagram shows the exchange rate for the UK£ in terms of the US$. The original equilibrium exchange rate is at E.
What will be the new exchange rate equilibrium of the UK£ following a reduction in UK interest rates and a rise in US interest rates?
Correct!
Wrong!
Wrong!
Country X trades with only two countries, Nigeria and Malaysia.
80 % of the country’s trade is with Nigeria and 20 % is with Malaysia.
The original value of the trade-weighted exchange rate index is 100.
The value of the country X’s currency against the Nigerian Naira rises by 10 %. The value of the country X’s currency against the Malaysian Ringgit rises by 50 %.
What will be the value of country X’s new trade-weighted exchange rate index?
Correct!
Wrong!
Wrong!
