You are given the following information: Quantity of imports and exports Foreign currency price of imports...

 

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You are given the following information: Quantity of imports and exports Foreign currency price of imports Domestic currency price of exports Exchange rate (i) (ii) 200 20 20 1.20 Calculate foreign currency and domestic currency values of imports and a country's overall balance of payments position. What will happen to the country's balance of payments position if the exchange rate increases to 1.50, assuming that the elasticities of demand for imports and exports are respectively equal to -0.40 and -0.20? What if the elasticities of demand for imports and exports are respectively equal to -1.10 and -1.20? You are given the following information: Quantity of imports and exports Foreign currency price of imports Domestic currency price of exports Exchange rate (i) (ii) 200 20 20 1.20 Calculate foreign currency and domestic currency values of imports and a country's overall balance of payments position. What will happen to the country's balance of payments position if the exchange rate increases to 1.50, assuming that the elasticities of demand for imports and exports are respectively equal to -0.40 and -0.20? What if the elasticities of demand for imports and exports are respectively equal to -1.10 and -1.20?

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