International Economics Edisi 13 Robert J. Carbaugh - Chapter 12

International Economics Edisi 13 Robert J. Carbaugh  - Chapter 12

Chapter 11 - Foreign Exchange Rate

Chapter 12 - Exchange Rate Determination

Chapter 13 - Mechanisms of International Adjustment

2. Why are international investors especially concerned about the real interest rate as opposed to the nominal rate?

Real Interest Rate merupakan Nominal Interest Rate dikurangi dengan tingkat inflasi atau dengan kata lain real interest rate  merupakan tingkat bunga yang sudah disesuaikan tingkat inflasi. Artinya, jika nominal interest rate naik tetapi tingkat inflasi juga naik maka real interest rate akankonstan. Oleh karena itu, investor asing seringkali berkonsentrasi pada real interest rate dan bukan pada nominal interest rate.

4. If a currency becomes overvalued in the foreignexchange market, what will be the likely impact on the home country’s trade balance? What if the home currency becomes undervalued?

Jika nilai tuar suatu mata uang adalah overvalued artinya mata uang tersebut terapresiasi, maka akan menyebabkan ekspor mengalami penurunan kareena brang dalam negeri menjadi lebih mahal dibandingka barang dari luar negeri. Sehingga permintaan akan turun, jika ekspor turun maka balance of trade akan deficit. Sebaliknya, jika nilai tukar mata uang undervalued, maka ekspor akan meningkat dan balance of trade akan surplus.

6. What factors underlie changes in a currency’s value in the short term?  

Dalam jangka waktu yang pendek, nilai tukar banyak dipengaruhi oleh keputusan dalam memegang asset financial domestic maupun asing. Dalam short run, investor hanya mempertimbangkan 2 kali yaitu relative interest rate dan expected change in exchange rates. Perubahan pada factor-faktor ini, jumlh perubahan (fluktuasi) pada nilai tukar yang menjadi objek yang diamati pada periode short run.

8. What is meant by exchange-rate overshooting? Why does it occur?

Exchange rate overshooting merupakan fenomena yang mampu menjelaskan mengapa nilai tukar dapat berubah secara drastic dalam hitungan hari.

Nilai tukar dikatakan overshoot ketika pada respon dalam jangka pendek (apresiasi maupaun depresiasi) mampu mengubah market fundamental lebih signifikan dibandingkan dalam jangka panjang. Pengumunan perubahan target monetary growth, perubahan pajak atau perubahn belanja pemerintah akan mengubah ekspetasi nilai tukar di masa yang akan dating sehingga akan mengubah keseimbangan nilai tukar secara cepat. Perubahan pada kebijakan berkontribusi pada volatilitas nilai tukar dalam system yang menentukan nilai tukar.

10.   Assuming market-determined exchange rates, use supply and demand schedules for pounds to analyze the effect on the exchange rate (dollars per pound) between the U.S. dollar and the UK pound under each of the following circumstances:

a.       Voter polls suggest that the UK’s conservative government will be replaced by radicals who pledge to nationalize all foreign-owned assets.

Dollar terapresiasi dan Pound terdepresiasi

b.      Both the UK and U.S. economies slide into recession, but the UK recession is less severe than the U.S. recession.

Pound terapresiasi dan dollar terdepresiasi

c.   The Federal Reserve adopts a tight monetary policy that dramatically increases U.S. interest rates.

Dollar terapresiasi dan Pound terdepresiasi

d.      Britain’s oil production in the North Sea decreases, and exports to the United States fall.

Pound terapresiasi dan dollar terdepresiasi

e.       The United States unilaterally reduces tariff on UK products.

Dollar terapresiasi dan Pound terdepresiasi

f.       Britain encounters severe inflation, while price stability exists in the United States.

Pound terapresiasi dan dollar terdepresiasi

g.      Fears of terrorism reduce U.S. tourism in the United Kingdom.

Dollar terapresiasi dan Pound terdepresiasi

h.      The British government invites U.S. firms to invest in British oil fields.

Pound terapresiasi dan dollar terdepresiasi

i.        The rate of productivity growth in Britain decreases sharply.

Pound terapresiasi dan dollar terdepresiasi

j.        An economic boom occurs in the United Kingdom, which induces the UK consumers to purchase more U.S.-made autos, trucks, and computers.

Dollar terapresiasi dan Pound terdepresiasi

k.      Ten-percent inflation occurs in both the United Kingdom and the United States.

Dollar and Pound terapresiasi

12. The appreciation in the dollar’s exchange value from 1980 to 1985 made U.S. products (less/more) expensive and foreign products (less/more) expensive, (decreased, increased) U.S. imports, and (decreased, increased) U.S. exports.

• U.S. products less expensive
• Foreign products more expensive
• Increased U.S. imports
• Decreased U.S. exports.

14. Suppose that the nominal interest rate on threemonth Treasury bills is 8 percent in the United States and 6 percent in the United Kingdom, and the rate of inflation is 10 percent in the United States and 4 percent in the United Kingdom.

a)      What is the real interest rate in each nation?

US Real Interest Rate = Nominal Interest Rate – Inflation

= 8% – 10%

= -2 %

UK Real Interset Rate = Nominal Interest Rate – Inflation

= 6% - 4%

= 2%

b)     In which direction would international investment flow in response to these real interest rates?

Investor akan cenderung memilih negara dengan tingkat suku buga riil yang rendah karena akan mendaptkan keuntungan yang sangat besar. Dalam hal ini para investor internasional cenderung akan menempatkan dananya untuk berinvestasi di negara US daripada di United Kingdom.

c)      What impact would these investment flows have on the dollar’s exchange value?

Dengan adanya investasi yang besar dari negara lain, ini akan membuat mata uanag United Stated yakni dollar akan mengalami apresiasasi atau mengalami penguatan terhadap mata uang United Kingdom yakni Pound.