Net trade and conditional currency effects
แนะนำใหม่| English | ความหมาย |
|---|---|
| exchange-rate quotation/eksˈtʃeɪndʒ reɪt kwəʊˈteɪʃn/ | การเสนอราคาอัตราแลกเปลี่ยน |
| non-price competitiveness/nɒn praɪs kəmˈpetɪtɪvnəs/ | ความสามารถในการแข่งขันที่ไม่ใช่ด้านราคา |
A decision you can investigate
- A depreciation can make one export cheaper to a foreign buyer while making its imported input more costly. Global demand or delivery quality may matter more than that price change.
- A currency calculation is the beginning of trade analysis.
Build the explanation
- An exchange-rate quotation 汇率报价 states one currency’s units per unit of another. Net trade X−M can change with domestic real income, exchange rates, global economic conditions, protectionism and non-price competitiveness 非价格竞争力. Higher domestic income often raises import demand, conditional on preferences and import responsiveness. Higher foreign income may raise export demand. Depreciation can alter relative prices but contracts, capacity, elasticities and imported inputs condition the net effect.
- Protection can reduce some imports yet invite retaliation or raise producers’ input costs. Product quality, reliability, after-sales service, technology and delivery times affect demand independently of price. Name the quotation and the changed determinant before claiming a shift in net exports or AD.
Work through the evidence
- The fictional quote moves from 5 to 6 local currency units per US dollar: the local currency depreciates. A local-priced export of 120 costs a foreign buyer 120/5=24 dollars initially, then 120/6=20 dollars if its local price stays fixed. A dollar-priced imported input of 10 costs 50 locally initially and 60 later.
- A producer using that input per export unit has margin before other costs 120−50=70, then 120−60=60 if local sale price remains 120. The foreign buyer sees a lower dollar price while the producer faces a lower local margin. If exporters raise local prices or contracts are fixed in dollars, the arithmetic changes. Without quantities and other flows, these two prices cannot determine the change in X−M.
What is the new dollar price with unchanged local sale price 120?
ความยาก 1/5 · 100 เหรียญ + โบนัสเล็กน้อยในการทำครั้งแรกวันนี้
Divide 120 by 6 local units per dollar.
Test the limits
- Demand may respond slowly to prices because contracts, habit and supplier switching take time. Higher import costs can raise domestic production costs and affect supply as well as demand. A global slowdown can weaken exports despite depreciation; improved quality or reliability can strengthen exports without currency change.
- Tariff protection is not costless: consumers, downstream producers, export access and retaliation matter. The examples do not predict an actual exchange rate or advise a currency transaction. Compare quantities, values, production capacity and time horizons before making a conditional current-account judgement.
What happens to the dollar-priced input’s local cost?
ความยาก 1/5 · 100 เหรียญ + โบนัสเล็กน้อยในการทำครั้งแรกวันนี้
Multiply 10 dollars by each quoted local-per-dollar rate.
A depreciation may fail to improve the net trade balance immediately.
ความยาก 1/5 · 100 เหรียญ + โบนัสเล็กน้อยในการทำครั้งแรกวันนี้
True. Contracts, low short-run elasticities, capacity limits and dearer imported inputs can delay or prevent the improvement (the J-curve).
Apply and explain your answer
- Why does a cheaper dollar price of the export not prove that the producer’s local profit rises?
- Its imported input becomes more costly; sales quantity and other costs also matter, and the stated per-unit margin falls.
Which can raise exports without lowering price?
ความยาก 1/5 · 100 เหรียญ + โบนัสเล็กน้อยในการทำครั้งแรกวันนี้
Demand can respond to non-price competitiveness.
Use the terms precisely
- non-price competitiveness: Ability to attract demand through quality, reliability, service or other attributes beyond price.
- exchange-rate quotation: The stated units of one currency per unit of another, needed to interpret an exchange-rate change.
Match the terms to their meanings.
ความยาก 2/5 · 140 เหรียญ + โบนัสเล็กน้อยในการทำครั้งแรกวันนี้
Use each term for its stated economic relationship.
The fictional quote moves from 5 to 6 local currency units per US dollar: the local currency depreciates. A local-priced export of 120 costs a foreign buyer 120/5=24 dollars initially, then 120/6=20 dollars if its local price stays fixed. A dollar-priced imported input of 10 costs 50 locally initially and 60 later. A producer using that input per export unit has margin before other costs 120−50=70, then 120−60=60 if local sale price remains 120. The foreign buyer sees a lower dollar price while the producer faces a lower local margin. If exporters raise local prices or contracts are fixed in dollars, the arithmetic changes. Without quantities and other flows, these two prices cannot determine the change in X−M.
Demand may respond slowly to prices because contracts, habit and supplier switching take time. Higher import costs can raise domestic production costs and affect supply as well as demand. A global slowdown can weaken exports despite depreciation; improved quality or reliability can strengthen exports without currency change. Tariff protection is not costless: consumers, downstream producers, export access and retaliation matter. The examples do not predict an actual exchange rate or advise a currency transaction. Compare quantities, values, production capacity and time horizons before making a conditional current-account judgement.
An exchange-rate quotation states one currency’s units per unit of another. Net trade X−M can change with domestic real income, exchange rates, global economic conditions, protectionism and non-price competitiveness. Higher domestic income often raises import demand, conditional on preferences and import responsiveness. Higher foreign income may raise export demand. Depreciation can alter relative prices but contracts, capacity, elasticities and imported inputs condition the net effect.
Write from 8 to 10 per dollar
- The quote moves from 8 to 10 local currency units per US dollar.
- A local-priced export of 200 and a dollar-priced input of 5 are unchanged in their own currencies. Find both dollar prices and both local margins.
The quote moves from 8 to 10 local units per dollar. An export stays priced at 200 locally, and its imported input stays priced at 5 dollars. What happens to the foreign buyer's dollar price and to the producer's local margin?
A higher local-per-dollar quote is a depreciation. The export becomes cheaper in dollars and the imported input becomes dearer at home.
What does the foreign buyer pay for the export after the quote moves to 10?
ความยาก 1/5 · 100 เหรียญ + โบนัสเล็กน้อยในการทำครั้งแรกวันนี้
200 divided by 10 is 20 dollars. The local price has not become the dollar price. Other options — 25 dollars (the original dollar price); 200 dollars (the local price).