国际经济学第九版英文课后答案第16单元.docx

国际经济学第九版英文课后答案第16单元.docx

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国际经济学第九版英文课后答案第16单元

Thebusi*CHAPTER16

（CoreChapter）

THEPRICEADJUSTMENTMECHANISMWITHFLEXIBLE

ANDFIXEDEXCHANGERATES

OUTLINE

16.1Introduction

16.2AdjustmentwithFlexibleExchangeRates

16.2aBalance-of-PaymentsAdjustmentwithExchangeRateChanges

16.2bDerivationoftheDemandCurveforForeignExchange

16.2cDerivationoftheSupplyCurveforForeignExchange

16.3EffectofExchangeRateChangesonDomesticPricesandtheTermsofTrade

CaseStudy16-1:

CurrencyDepreciationandInflationinDevelopingCountries

16.4StabilityofForeignExchangeMarkets

16.4aStableandUnstableForeignExchangeMarkets

16.4bTheMarshall-LernerCondition

16.5ElasticitiesintheRealWorld

16.5aElasticityEstimates

16.5bTheJ-CurveEffectandRevisedElasticityEstimates

CaseStudy16-2:

EstimatedPriceElasticitiesinInternationalTrade

CaseStudy16-3:

EffectiveExchangeRateoftheDollarandtheU.S.CurrentAccountBalance

CaseStudy16-4:

DollarDepreciationandtheU.S.CurrentAccountBalance

CaseStudy16-5:

ExchangeRatesandCurrentAccountBalancesDuringtheEuropeanFinancialCrisisoftheEarly1990s

16.5cCurrencyPass-Through

CaseStudy16-6:

ExchangeRatePass-ThroughtoImportPricesinIndustrialCountries

16.6AdjustmentUndertheGoldStandard

16.6aTheGoldStandard

16.6bThePrice-Specie-FlowMechanism

Appendix:

A16.1TheEffectofExchangeRateChangesonDomesticPrices

A16.2DerivationoftheMarshall-LernerCondition

A16.3StabilityofForeignExchangeMarketsOnceAgain

A16.4DerivationoftheGoldPointsandGoldFlowsUndertheGoldStandard

KeyTerms

DevaluationGoldstandard

DutchdiseaseMintparity

StableforeignexchangemarketGoldexportpoint

UnstableforeignexchangemarketGoldimportpoint

Marshall-LernerconditionPrice-specieflowmechanism

ElasticitypessimismQuantitytheoryofmoney

IdentificationproblemRulesofthegameofthegoldstandard

J-curveeffectCurrencyboard

Pass-througheffect

LectureGuide:

1.Thisisanimportantandchallengingcorechapter.

2.Iwouldcoversections1and2inthefirstlecture.Myexperienceisthatstudentsfindparticularlydifficultthederivationofthedemandandsupplycurvesforforeignexchange.Therefore,Iwouldexplainthematerialinsections16.2aand16.2bverycarefullyandslowly.Iwouldalsoassignproblems1to6.

3.Iwouldcoversections3and4inthesecondlectureandpayspecialattentiontosection16.4b.Iwouldalsoassignproblems7to9.

4.Inthethirdlecture,Iwouldpresentsections5and6andassignproblems10to15.

AnswertoProblems:

1.Thenation'sdemandcurveforimportsisderivedbythehorizontaldistanceofthenation'ssupplycurvefromthenation'sdemandcurveofthetradablecommodityateachpricebelowtheequilibriumlevelofthetradablecommodity.SeeFigure1onthenextpage.

2.Thenation'ssupplycurveforexportsisderivedbythehorizontaldistanceofthenation'sdemandcurvefromthenation'ssupplycurveofthetradablecommodityateachpriceabovetheequilibriumlevelofthetradablecommodity.SeeFigure2.

3.AdepreciationofthedollarshiftsDMdownwardverticallyandleavesPM（inpounds）andthequantityofimportsunchanged（seeFigure3）.

4.AdepreciationofthedollarshiftsSXdownwardverticallyandleavesPX（inpounds）andthequantityofexportsunchanged（seeFigure4）.

5.AdepreciationofthedollarreducesthequantitydemandedofpoundsbylesswhenDMisinelastic（pointBinFigure5）thanwhenDMiselastic（pointC）.

6.AdepreciationofthepoundincreasesthequantitysuppliedofpoundsbylesswhenSXisinelastic（pointBinFigure6）thanwhenSXiselastic（pointC）.

7.SMisinfinitelyelasticforasmallnationbecauseasmallnationcandemandanyquantityofimportswithoutaffectingitsprice;similarly,DXisinfinitelyelasticbecauseasmallnationcansellanyamountofitsexportgoodwithouthavingtoreduceitsprice.

8.Thebalanceofpaymentsofasmallnationalwaysimproveswithadepreciationor

devaluationofitscurrencybecausethesmallnation'squantitydemandedofpoundsalwaysfalls（unlessDMisvertical）andthequantitysuppliedofpoundsalwaysrises.

9.SeethetwopanelsofFigure7onpage156.

PanelAshowsthatadevaluationordepreciationofthenation'scurrencyresultsindownwardshiftinDMand,byitself,resultsinareductioninthequantitydemandedoftheforeigncurrencybythenationandthustoanimprovementinthenation'sbalanceofpayments（trade）.

PanelBshowsthatadevaluationordepreciationofthenation'scurrencyresultsinadownwardshiftinSXwhich,byitself,leadstoanetreductioninthequantityofforeigncurrencyearnedbythenationthroughexportsandtoaworseningofthenation'sbalanceofpayments（trade）.

Sincethereductionintheforeignexchangeearningsofthenationexceedsthereductioninthedemandforforeigncurrencybythenation（comparetheshadedareasinthetwopanelsofFigure7）,thenationsbalanceofpayments（trade）worsensasaresultofthedevaluationordepreciation,indicatinganunstableforeignexchangemarket.

10.Althoughtradeneednotbebalancedbilaterallyorevenmultilaterally（withinternationalprivatecapitalflows）,theUnitedStatescanbesaidtohaveatradedeficitwithJapanbecauseofthesizeofthistradedeficitandthefactthatithaspersistedforsuchalongtimedespitethesharpdepreciationofthedollarwithrespecttotheyenduringthepastdecade.

11.EventhoughtheU.S.tradedeficitwithJapanhasnotbeenreducedasaresultofthesharpdepreciationofthedollarwithrespecttotheyenduringthepast10years,wecannotconcludethatthetradeorelasticityapproachtobalanceofpaymentsadjustmentdoesnotwork.TheU.S.tradedeficitwithJapanseemtorespondonlywithalagofseveralyearstoexchange-ratechanges.Inadditionotherforcesmayhaveoverwhelmedtheeffectofadepreciationofthedollarwithrespecttotheyen.Forexample,ifJapanisinthecontractionarypartofthebusinesscyclewhiletheUnitedStatesatanexpansionarypartofthecycle,theU.S.tradedeficitwithJapanmayincreasebecauseJapandemandsfewerAmericanproductswhiletheUnitedStatesdemandsmoreJapaneseproducts,despitethedepreciationofthedollarvis-avistheyen.

12.Since$35=1ounceofgold=£14,thedollarpriceof£ortheexchangerate（R=$/£）isfixedat$35/14=$2.50.Thus,fixingthepriceofgoldintermsofnationalcurrenciesunderthegoldstandardestablishesafixedrelationshiporexchangeratebetweenanytwocurrencies.Thisisthemintparity.

13.Sincetoship$2.50worthofgoldfromNewYorktoLondoncosts1%or2.5c,theU.S.goldexportpointorupperlimitoftheexchangerateequals$2.50plus2.5cor$2.525.ThereasonforthisisthatnoU.S.residentwouldpaymorethan$2.525toobtain£1,sincehecouldbuy$2.50worthofgoldfromtheU.S.treasury,shipittotheUnitedKingdomatacostof2.5candsellittotheU.K.treasuryfor£1.Thus,underthegoldstandard,theexchangerateofthepoundcanneverriseabove（andthedollardepreciatepast）theU.S.goldexportpointof$2.525.

14.Similarly,theexchangeratecanneverfallbelow（andthedollarappreciatepast）theU.S.goldimportpointof$2.475.ThereasonforthisisthatnoU.S.residentwouldacceptlessthan$2.475foreachpoundsold,sincehecouldalwaysbuyapoundworthofgoldfromtheU.K.treasuryatthefixedprice,importthisgoldintotheUnitedStatesatacostof2.5c,andresellittotheU.S.treasuryfor$2.50.Thus,theU.S.residentcangetpoundsat$2.475（$2.50minus2.5c）andwouldnotacceptlessinsellingthem.Notethattheshippingcostofgoldincludesnotonlythetransportationcostbutalsoallotherhandlingcharges,insurance,andtheinterestforegonewhilethegoldisintransit.

App.1N=（$PX/$PM）=（$4/$2）=2or200%.

Theresultsisthesameasthatobtainedinsection16.2b,wherePXandPMwerebothmeasuredinpounds.

App.2Adepreciationordevaluationofasmallcountry'snationalcurrencyisnotlikelytoaffectitstermsoftradebecauseDMandSXareinfinitelyelasticorhorizontalforasmallnation,andadepreciationoradevaluationofitscurrencywouldleavePMandPXunchangedwhenmeasuredintermsofeitherthedomesticortheforeigncurrency.

App.3Thefactthatanunstableforeignexchangemarketeventuallybecomesstableforlargeenoughexchangeratechangesisnotofpracticalimportancebecausesuchlargechangesinexchangerateswouldbeveryinflationaryandareusuallyoutsidemostnations'experienceofactualexchangeratechanges.

App.4IfD£shiftstoD'£andS£shiftstoS'£inFigure16-10,theexchangerateRwouldbeR=$4.86/£1andthebalanceofpaymentswouldbeinequilibriumbothunderthegoldstandardandunderaflexibleexchangeratesystem.

Multiple-choiceQuestions:

1.Themoreelasticisanation'sdemandandsupplyofforeignexchangethe:

a.largeristhedevaluationordepreciationrequiredtocorrectadeficitofagivensizeinthenation'sbalanceofpayments

*b.smalleristhedevaluationordepreciationrequiredtocorrectadeficitofagivensizeinthenation'sbalanceofpayments

c.lessfeasibleisaflexibleexchangeratesystem

d.lessfeasibleisadevaluationasapolicytocorrectadeficitinthenation'sbalanceofpayments

2.Anation'sdemandcurveforforeignexchangeisderivedfromthe:

a.foreigndemandcurveforthenations'exports

b.nation'ssupplycurveofexports

*c.domesticdemandcurveforimpo