IGCSE/GCSE/O & A Level/IB/University Student Forum

Qualification => Subject Doubts => GCE AS & A2 Level => Commerce => Topic started by: pastyear on September 26, 2009, 10:34:54 am

Title: Economic
Post by: pastyear on September 26, 2009, 10:34:54 am: hello, i have 3 questions want to ask you. It may difficult for you but you can answer it based on your knowledge plus why you choose the answer.Thanks

Q1. What will happen if a country allows its exchange rate to float freely?
   A. Foreign exchange reservrs will no longer be needed
   B. Inflation will follow the trend of inflation in the country's trading
   partners.
   C. The current account of the balance of payments will always balance
   D. The monetary authorities will lose their ability to contol the money
   supply

Q2. In the US in the summer of 2000 the Yen was $ 0.50. In the summer
   of 2001 the Yen was $ 0.75. How was this change likely to have
   effect the US ?
   A. higher demand for imports
   B. higher imported inflation
   C. higher priced exports
   D. higher unemployment

Q3. The table shows the index of retail prices for a country on January
   1st in successive years.
   Year ( Jan 1st) Retail Price Index
   1990 60
   1991 80
   1992 100
   1993 125
   1994 160
Which year has the highest rate of inflation?
   A 1990
   B 1991
   C 1992
   D 1993
Title: Re: Economic
Post by: astarmathsandphysics on September 26, 2009, 11:12:38 am: 1.a/c 2.c 3.a
Title: Re: Economic
Post by: nid404 on September 26, 2009, 04:18:45 pm: 1 should be C...2 should I'm confident be B and 3 one I'm not very sure
check your messages pastyear
Title: Re: Economic
Post by: astarmathsandphysics on September 26, 2009, 07:33:25 pm: Q2. In the US in the summer of 2000 the Yen was $ 0.50. In the summer
of 2001 the Yen was $ 0.75. How was this change likely to have
effect the US ?
A. higher demand for imports
B. higher imported inflation
C. higher priced exports
D. higher unemployment

Q3. The table shows the index of retail prices for a country on January
1st in successive years.
Year ( Jan 1st) Retail Price Index
1990 60
1991 80
1992 100
1993 125
1994 160
Which year has the highest rate of inflation?
A 1990
B 1991
C 1992
D 1993

1.The Yen buys more dollars so the dollar has depreciated. This will mean exports are more expensev. This means inflation B

3. 1990 inlation20/60=33%
1991 inflation20/80=25%
1992 inflation 25/100=25%
1994 inlatin 35/125=28%
A
Title: Re: Economic
Post by: nid404 on September 27, 2009, 07:24:13 am: The exports in real terms may be expensive....you see something that cost 15yen before would still be 15yen.....just that the US dollars to be paid for the 15 yen would be more....so they r not priced higher in actual terms.....Imported inflation can occur through a depreciating AUD which makes it more expensive to purchase overseas goods.

Third one I wasn't sure anyways...I think you're right
Title: Re: Economic
Post by: nid404 on September 27, 2009, 09:06:18 am: @pastyear what r the answers?
Title: Re: Economic
Post by: Nanavel on September 28, 2009, 08:26:35 pm: Q1. What will happen if a country allows its exchange rate to float freely?
A. Foreign exchange reservrs will no longer be needed
B. Inflation will follow the trend of inflation in the country's trading
partners.
C. The current account of the balance of payments will always balance
D. The monetary authorities will lose their ability to contol the money
supply

They will face losses sometimes and other time they wont .however , the countries will find other country who's inflation rate is stable . I am not sure about this .

Q2. In the US in the summer of 2000 the Yen was $ 0.50. In the summer
of 2001 the Yen was $ 0.75. How was this change likely to have
effect the US ?
A. higher demand for imports
B. higher imported inflation
C. higher priced exports
D. higher unemployment
As i see it , the US has imported from a higher inflation . but it could also be higher demand for the imports . I think the answer is B.

Q3. The table shows the index of retail prices for a country on January
1st in successive years.
Year ( Jan 1st) Retail Price Index
1990 60
1991 80
1992 100
1993 125
1994 160
Which year has the highest rate of inflation?
A 1990
B 1991
C 1992
D 1993
In this question , the inflation rate has been the same amount rising every year , but in the year 1993 it has increased by 5 more ... could be the Answer .

This is my first Time taking Economics in AS-level . I dont think i am good at it so far . Please Correct my answers if they are wrong . I like to know the Correct answers with reasons .
Title: Re: Economic
Post by: astarmathsandphysics on September 28, 2009, 09:40:47 pm: 1990 60
1991 80
1992 100
1993 125
1994 160

this is how the inflation rate is worked out

For 1990: $\frac {increase}{original price}*100%$

For 1990 it would be $\frac {20}{60} *100%=33.3%$
Title: Re: Economic
Post by: nid404 on September 29, 2009, 07:42:40 am: lol...pastyear just said the answer is B for all three
Title: Re: Economic
Post by: Nanavel on September 30, 2009, 07:50:48 pm: Quote from: astarmathsandphysics on September 28, 2009, 09:40:47 pm
1990 60
1991 80
1992 100
1993 125
1994 160

this is how the inflation rate is worked out

For 1990: $\frac {increase}{original price}*100%$

For 1990 it would be $\frac {20}{60} *100%=33.3%$

U are very helpful ..
Title: Re: Economic
Post by: astarmathsandphysics on September 30, 2009, 07:57:38 pm: I like it when you say that. It make me think that all the crimes commited everywhere, do, in a sense, help someone.