国际经济学第九版英文课后答案 第16单元.docx

1、国际经济学第九版英文课后答案 第16单元*CHAPTER 16(Core Chapter)THE PRICE ADJUSTMENT MECHANISM WITH FLEXIBLEAND FIXED EXCHANGE RATESOUTLINE16.1 Introduction16.2 Adjustment with Flexible Exchange Rates 16.2a Balance-of-Payments Adjustment with Exchange Rate Changes 16.2b Derivation of the Demand Curve for Foreign Excha

2、nge 16.2c Derivation of the Supply Curve for Foreign Exchange16.3 Effect of Exchange Rate Changes on Domestic Prices and the Terms of Trade Case Study 16-1: Currency Depreciation and Inflation in Developing Countries16.4 Stability of Foreign Exchange Markets 16.4a Stable and Unstable Foreign Exchang

3、e Markets 16.4b The Marshall-Lerner Condition16.5 Elasticities in the Real World 16.5a Elasticity Estimates 16.5b The J-Curve Effect and Revised Elasticity Estimates Case Study 16-2: Estimated Price Elasticities in International Trade Case Study 16-3: Effective Exchange Rate of the Dollar and the U.

4、S. Current Account Balance Case Study 16-4: Dollar Depreciation and the U.S. Current Account Balance Case Study 16-5: Exchange Rates and Current Account Balances During the European Financial Crisis of the Early 1990s 16.5c Currency Pass-Through Case Study 16-6: Exchange Rate Pass-Through to Import

5、Prices in Industrial Countries16.6 Adjustment Under the Gold Standard 16.6a The Gold Standard 16.6b The Price-Specie-Flow MechanismAppendix: A16.1 The Effect of Exchange Rate Changes on Domestic Prices A16.2 Derivation of the Marshall-Lerner Condition A16.3 Stability of Foreign Exchange Markets Once

6、 Again A16.4 Derivation of the Gold Points and Gold Flows Under the Gold StandardKey TermsDevaluation Gold standard Dutch disease Mint parityStable foreign exchange market Gold export pointUnstable foreign exchange market Gold import point Marshall-Lerner condition Price-specie flow mechanismElastic

7、ity pessimism Quantity theory of moneyIdentification problem Rules of the game of the gold standardJ-curve effect Currency board Pass-through effectLecture Guide:1. This is an important and challenging core chapter.2. I would cover sections 1 and 2 in the first lecture. My experience is that student

8、s find particularly difficult the derivation of the demand and supply curves for foreign exchange. Therefore, I would explain the material in sections 16.2a and 16.2b very carefully and slowly. I would also assign problems 1 to 6.3. I would cover sections 3 and 4 in the second lecture and pay specia

9、l attention to section 16.4b. I would also assign problems 7 to 9. 4. In the third lecture, I would present sections 5 and 6 and assign problems 10 to 15.Answer to Problems:1. The nations demand curve for imports is derived by the horizontal distance of the nations supply curve from the nations dema

10、nd curve of the tradable commodity at each price below the equilibrium level of the tradable commodity. See Figure 1 on the next page. 2. The nations supply curve for exports is derived by the horizontal distance of the nations demand curve from the nations supply curve of the tradable commodity at

11、each price above the equilibrium level of the tradable commodity. See Figure 2. 3. A depreciation of the dollar shifts DM downward vertically and leaves PM (in pounds) and the quantity of imports unchanged (see Figure 3).4. A depreciation of the dollar shifts SX downward vertically and leaves PX (in

12、 pounds) and the quantity of exports unchanged (see Figure 4).5. A depreciation of the dollar reduces the quantity demanded of pounds by less when DM is inelastic (point B in Figure 5) than when DM is elastic (point C).6. A depreciation of the pound increases the quantity supplied of pounds by less

13、when SX is inelastic (point B in Figure 6) than when SX is elastic (point C).7. SM is infinitely elastic for a small nation because a small nation can demand any quantity of imports without affecting its price; similarly, DX is infinitely elastic because a small nation can sell any amount of its exp

14、ort good without having to reduce its price.8. The balance of payments of a small nation always improves with a depreciation or devaluation of its currency because the small nations quantity demanded of pounds always falls (unless DM is vertical) and the quantity supplied of pounds always rises.9. S

15、ee the two panels of Figure 7 on page 156. Panel A shows that a devaluation or depreciation of the nations currency results in downward shift in DM and, by itself, results in a reduction in the quantity demanded of the foreign currency by the nation and thus to an improvement in the nations balance

16、of payments (trade). Panel B shows that a devaluation or depreciation of the nations currency results in a downward shift in SX which, by itself, leads to a net reduction in the quantity of foreign currency earned by the nation through exports and to a worsening of the nations balance of payments (t

17、rade). Since the reduction in the foreign exchange earnings of the nation exceeds the reduction in the demand for foreign currency by the nation (compare the shaded areas in the two panels of Figure 7), the nations balance of payments (trade) worsens as a result of the devaluation or depreciation, i

18、ndicating an unstable foreign exchange market.10. Although trade need not be balanced bilaterally or even multilaterally (with international private capital flows), the United States can be said to have a trade deficit with Japan because of the size of this trade deficit and the fact that it has per

19、sisted for such a long time despite the sharp depreciation of the dollar with respect to the yen during the past decade.11. Even though the U.S. trade deficit with Japan has not been reduced as a result of the sharp depreciation of the dollar with respect to the yen during the past 10 years, we cann

20、ot conclude that the trade or elasticity approach to balance of payments adjustment does not work. The U.S. trade deficit with Japan seem to respond only with a lag of several years to exchange-rate changes. In addition other forces may have overwhelmed the effect of a depreciation of the dollar wit

21、h respect to the yen. For example, if Japan is in the contractionary part of the business cycle while the United States at an expansionary part of the cycle, the U.S. trade deficit with Japan may increase because Japan demands fewer American products while the United States demands more Japanese pro

22、ducts, despite the depreciation of the dollar vis-avis the yen. 12. Since $35=1 ounce of gold = 14, the dollar price of or the exchange rate (R=$/) is fixed at $35/14=$2.50. Thus, fixing the price of gold in terms of national currencies under the gold standard establishes a fixed relationship or exc

23、hange rate between any two currencies. This is the mint parity.13. Since to ship $2.50 worth of gold from New York to London costs 1% or 2.5c, the U.S. gold export point or upper limit of the exchange rate equals $2.50 plus 2.5c or $2.525. The reason for this is that no U.S. resident would pay more

24、than $2.525 to obtain 1, since he could buy $2.50 worth of gold from the U.S. treasury, ship it to the United Kingdom at a cost of 2.5c and sell it to the U.K. treasury for 1. Thus, under the gold standard, the exchange rate of the pound can never rise above (and the dollar depreciate past) the U.S.

25、 gold export point of $2.525. 14. Similarly, the exchange rate can never fall below (and the dollar appreciate past) the U.S. gold import point of $2.475. The reason for this is that no U.S. resident would accept less than $2.475 for each pound sold, since he could always buy a pound worth of gold f

26、rom the U.K. treasury at the fixed price, import this gold into the United States at a cost of 2.5c, and resell it to the U.S. treasury for $2.50. Thus, the U.S. resident can get pounds at $2.475 ($2.50 minus 2.5c) and would not accept less in selling them. Note that the shipping cost of gold includ

27、es not only the transportation cost but also all other handling charges, insurance, and the interest foregone while the gold is in transit. App. 1 N=($PX/$PM)=($4/$2)=2 or 200%. The results is the same as that obtained in section 16.2b, where PX and PM were both measured in pounds.App. 2 A depreciat

28、ion or devaluation of a small countrys national currency is not likely to affect its terms of trade because DM and SX are infinitely elastic or horizontal for a small nation, and a depreciation or a devaluation of its currency would leave PM and PX unchanged when measured in terms of either the dome

29、stic or the foreign currency.App.3 The fact that an unstable foreign exchange market eventually becomes stable for large enough exchange rate changes is not of practical importance because such large changes in exchange rates would be very inflationary and are usually outside most nations experience

30、 of actual exchange rate changes.App. 4 If D shifts to D and S shifts to S in Figure 16-10, the exchange rate R would be R=$4.86/1 and the balance of payments would be in equilibrium both under the gold standard and under a flexible exchange rate system.Multiple-choice Questions:1. The more elastic

31、is a nations demand and supply of foreign exchange the:a. larger is the devaluation or depreciation required to correct a deficit of a given size in the nations balance of payments*b. smaller is the devaluation or depreciation required to correct a deficit of a given size in the nations balance of p

32、aymentsc. less feasible is a flexible exchange rate systemd. less feasible is a devaluation as a policy to correct a deficit in the nations balance of payments2. A nations demand curve for foreign exchange is derived from the:a. foreign demand curve for the nations exportsb. nations supply curve of exports*c. domestic demand curve for imports and