TAILIEUCHUNG - Ten Principles of Economics - Part 67

Ten Principles of Economics - Part 67. Economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by a single central planner but through the combined actions of millions of households and firms. Economists therefore study how people make decisions: how much they work, what they buy, how much they save, and how they invest their savings. Economists also study how people interact with one another. | CHAPTER 30 A MACROECONOMIC THEORY OF THE OPEN ECONOMY 683 Equilibrium Quantity of Dollars Exchanged quantity into Foreign Currency government bond it needs to change dollars into yen so it supplies dollars in the market for foreign-currency exchange. Net exports represent the quantity of dollars demanded for the purpose of buying . net exports of goods and services. For example when a Japanese airline wants to buy a plane made by Boeing it needs to change its yen into dollars so it demands dollars in the market for foreign-currency exchange. What price balances the supply and demand in the market for foreign-currency exchange The answer is the real exchange rate. As we saw in the preceding chapter the real exchange rate is the relative price of domestic and foreign goods and therefore is a key determinant of net exports. When the . real exchange rate appreciates . goods become more expensive relative to foreign goods making . goods less attractive to consumers both at home and abroad. As a result exports from the United States fall and imports into the United States rise. For both reasons net exports fall. Hence an appreciation of the real exchange rate reduces the quantity of dollars demanded in the market for foreign-currency exchange. Figure 30-2 shows supply and demand in the market for foreign-currency exchange. The demand curve slopes downward for the reason we just discussed A higher real exchange rate makes . goods more expensive and reduces the quantity of dollars demanded to buy those goods. The supply curve is vertical because the quantity of dollars supplied for net foreign investment does not depend on the real exchange rate. As discussed earlier net foreign investment depends on the real interest rate. When discussing the market for foreign-currency exchange we take the real interest rate and net foreign investment as given. The real exchange rate adjusts to balance the supply and demand for dollars just as the price of any good adjusts

• Quản lý Nhà nước
• 10 nguyên tắc trong kinh tế học
• Nguyên lý kinh tế
• chi phí cơ hội
• quản lý nguồn lực
• opportunity cost
• in the overall economy
• Sáng kiến kinh nghiệm
• Sáng kiến kinh nghiệm THPT
• Sáng kiến kinh nghiệm môn Sinh học 10
• Nguyên tắc giáo dục phát triển năng lực
• Cấu trúc tế bào