Fundamentals

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1. An Appraisal (revaluation) can turn a good imported into exportable: an imported good is characterized by Pi = tc * Pe <P, where Pi is the international price in national currency exchange rate tc, Pe the foreign price; Pa autarky price in equilibrium. As there is a Pi <P the quantity demanded exceeds quantity supplied: qd> qo, so imports are qd-q; to be an appreciation of the exchange rate decreases, so the Pi decreases in proportion to As low tc, if this occurs increases the quantity demanded and quantity supplied decreases, which is reflected in pd '> q', therefore qd'-qo '> qd-q, therefore imports increase, reflected in qd-q <qd'-q ', hence the conclusion is invalid because imports increase. 2. A depreciation can make exportable goods importable: an exportable good is characterized by Pi = tc * Pe> Pa, where P is the price international in national currency, tc the exchange rate, foreign price Pe and Pa autarky price in equilibrium. As there are more than a Pi Pa quantity supplied is greater than the quantity demanded, we can see q> qd, and the difference between these amounts on exports, we can see q-qd. Since the depreciation rate increases and this leads to price increases proportionately as tc increases, we can see in Pi '. By increasing the price, quantity supplied increases as the bidder is willing to offer more for a higher price, demand and decreases the amount because the applicant to raise the price to buy desinsentiva therefore the amount offered is still higher quantity demanded, we can see q> qd therefore remains exportable good which can be seen in q-qd, therefore the conclusion is invalid because the exportable good is even more than before .



3. A revaluation can make exportable goods importable:an exportable good is characterized by Pi = tc * Pe> P, where Pi is the international price in domestic currency; tc the exchange rate, external price Pe, Pa autarky price in equilibrium. As there is a Pi> Pa quantity supplied is greater than the quantity demanded, we can see q> qd, therefore exports are reflected in q-qd, to be revalued the exchange rate decreases, so the Pi decreases in proportion to what low tc, if this occurs increases the quantity demanded and the quantity supplied decreases, but as it is not known what proportion decreases the rate we are dealing with three cases: one where the type exchange decreased but in small quantities, which leads us to have a price below Pi, but higher than Pa, which is reflected in Pi '> Pa, where the quantity demanded remains less than the amount offered, which is reflects in qo '> qd' therefore remains exportable good in this case the conclusion would be invalid, 2: also can be given that Pi decreases until it is equal autarky price, which can be seen in''Pi = Pa, then the quantity supplied would equal the amount demanded, which can be seen in''q''= qd, for both imports and exports would be equal to 0, in this case the conclusion would also be invalid. 3. and the third case the exchange rate falls in such quantities that the new price will be less than Pa, which is reflected in Pi'' '<P, in this case the quantity demanded is greater than the amount offered, the qd reflected in'' '> q''', which leads us to conclude that imports increase, which is seen in qd'''-q'' ', therefore in this case the conclusion would be valid.

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