Image transcription text ECON 1A Home Work VI 25 points 1. Why would a rise in the value of the dollar prompt U.S. manufacturers to

Image transcription text ECON 1A
Home Work VI
25 points
1. Why would a rise in the value of the dollar prompt U.S. manufacturers to build
production plants in Mexico? (5 points)
2. How do changes in the value of the U.S. dollar affect foreign enrollments at U.S.
colleges?
(5 points)
3. For each of the following possible events, indicate whether the global value of the U.S.
dollar will A: rise or B: fall. (10 points)
(a) American cars become suddenly more popular abroad.
(b) Inflation in the United States accelerates.
(c) The United States falls into a recession.
(d) Interest rates in the United States drop.
(e) The United States experiences rapid increases in productivity.
(f) War is declared in the Middle East.
(g) The stock markets in the United States collapse.
4. How would each of these events affect the supply or demand for Japanese yen? (5 points)
(a) Stronger U.S. economic growth.
(b) A decline in Japanese interest rates.
(c) Higher inflation in the United States.
(d) A Japanese tsunami.

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