Question 1

​A Swiss consumer wants to buy an American laptop.The exchange rate is 1USD=0.89CHF (Swiss Francs) .The laptop costs $800.How much would the laptop cost him in Swiss Francs?

Accepted Answer

A)  ​1200 Francs
B)  1160Francs
C)  890Francs
D)  ​712 FrancsE) None of the above
F) B) and C)

Question 2

According to the purchasing power parity,if the price level in the US rises relative to Mexico​

Accepted Answer

A)  ​The dollar will appreciate relative to the peso
B)  The dollar will depreciate relative to the peso
C)  There is no effect on either currency
D)  ​None of the aboveE) B) and D)
F) A) and B)

Question 3

​An expectation of a price increase in the future would cause consumers to______ and producers to_____

Accepted Answer

A)  ​Delay consumption;delay production
B)  Delay production;accelerate production
C)  Accelerate consumption;delay production
D)  ​Accelerate consumption;accelerate productionE) A) and B)
F) B) and C)

Question 4

​Holding other things constant,if the Japanese Yen,appreciates,it makes the Japanese products

Accepted Answer

A)  ​Less attractive to US customers
B)  More attractive to US customers
C)  Neither more nor less attractive to US customers
D)  ​None of the aboveE) A) and C)
F) A) and D)

Question 5

Holding other things constant,a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to _____________ and the supply for Shilling to __________.​

Accepted Answer

A)  ​Increase;decrease
B)  Increase,increase
C)  Decrease;Increase
D)  ​Decrease;DecreaseE) B) and C)
F) All of the above

Question 6

​US Exports
After staying around 1.35 US dollars per Euro for years,the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014.What affect does this have US exports to Europe?

Accepted Answer

The demand for American goods by Europea...

Question 7

​In the market for Canadian dollars measured in US dollars,the supply of US dollars is

Accepted Answer

A)  ​The supply of Canadian dollars
B)  The demand for Canadian Dollars
C)  The demand for US dollars
D)  ​None of the aboveE) B) and C)
F) A) and D)

Question 8

A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n) ________ in the demand of US dollars and a(n) _________in the demand of the Chinese Yuan.​

Accepted Answer

A)  ​Increase;Increase
B)  Increase;Decrease
C)  Decrease;Increase
D)  ​Decrease;DecreaseE) A) and B)
F) A) and C)

Question 9

​In the market for Canadian dollars measured in US dollars,the supply of Canadian dollars is

Accepted Answer

A)  ​The demand for Canadian dollars
B)  The demand for US Dollars
C)  The supply of US dollars
D)  ​None of the aboveE) B) and D)
F) B) and C)

Question 10

​A widget costs $1000 in the US and CAD$1200 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

Accepted Answer

A)  ​Appreciate
B)  Depreciate
C)  Not change
D)  ​None of the aboveE) A) and B)
F) C) and D)

Question 11

​In the case where interest rates are higher in Canada,which of the following is an example of a "carry trade"

Accepted Answer

A)  ​Increase borrowing in the US,convert to Canadian dollars and invest in Canada
B)  Increase borrowing in the US and invest in the US
C)  Increase borrowing in Canada,convert to dollars and invest in the US
D)  ​Increase borrowing in Canada and invest in CanadaE) A) and D)
F) B) and C)

Question 12

​Currency devaluations help suppliers because they make exports ________ expensive

Accepted Answer

A)  ​Less
B)  More
C)  All of the above
D)  ​None of the aboveE) B) and C)
F) A) and C)

Question 13

​A lawn mower costs $500 in the US and 5188 Mexican Pesos in Mexico.The current exchange rate is 1USD=12.97MXN.At this rate,

Accepted Answer

A)  ​The good costs more in the US
B)  The good costs more in Mexico
C)  The good costs the same across the two countries
D)  ​None of the aboveE) B) and D)
F) A) and B)

Question 14

​An individual in the US wants to buy a car from England which costs 12,000 pounds.If the exchange rate is 1 pound = $1.75,how much would the car cost him in dollars?

Accepted Answer

A)  ​$21,000
B)  $6,800
C)  $12,000
D)  ​Need more informationE) A) and C)
F) B) and C)

Question 15

When interest rates fall,people are​

Accepted Answer

A)  ​More likely to borrow
B)  Less likely to borrow
C)  Not likely to change borrowing patterns
D)  ​None of the aboveE) A) and C)
F) B) and D)

Question 16

If the Canadian dollar appreciates,holding other things constant,it makes Canadian imports​

Accepted Answer

A)  ​More expensive for Canadian customers
B)  Less expensive for Canadian customers
C)  Neither more or less expensive for importers
D)  ​None of the aboveE) All of the above
F) A) and B)

Question 17

Due to a boom in the US,the average rate of return on investments is likely to rise causing the demand for US dollar to ​

Accepted Answer

A)  ​Increase
B)  Decrease
C)  Not change
D)  ​None of the aboveE) A) and C)
F) None of the above

Question 18

​Holding other things constant,increases in the price level in the US will

Accepted Answer

A)  ​Cause the dollar to appreciate
B)  Cause the dollar to depreciate
C)  Does not affect the dollar value
D)  ​None of the aboveE) A) and D)
F) A) and B)

Question 19

The term to describe one currency in terms of another is called​

Accepted Answer

A)  ​The interest rates
B)  The market price
C)  The inflation rate
D)  ​The exchange rateE) A) and D)
F) B) and D)

Question 20

​When interest rates go up,people are

Accepted Answer

A)  ​More likely to borrow
B)  Less likely to borrow
C)  Does not affect a person's consumption
D)  ​None of the aboveE) C) and D)
F) A) and B)

Exam 10: Foreign Exchange, Trade, and Bubbles

A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n) ________ in the demand of US dollars and a(n) _________in the demand of the Chinese Yuan.​

Correct AnswerverifiedShow Answer

The term to describe one currency in terms of another is called​

Correct AnswerverifiedShow Answer

If the Canadian dollar appreciates,holding other things constant,it makes Canadian imports​

Correct AnswerverifiedShow Answer

​A Swiss consumer wants to buy an American laptop.The exchange rate is 1USD=0.89CHF (Swiss Francs) .The laptop costs $800.How much would the laptop cost him in Swiss Francs?

Correct AnswerverifiedShow Answer

​In the case where interest rates are higher in Canada,which of the following is an example of a "carry trade"

Correct AnswerverifiedShow Answer

Due to a boom in the US,the average rate of return on investments is likely to rise causing the demand for US dollar to ​

Correct AnswerverifiedShow Answer

​When interest rates go up,people are

Correct AnswerverifiedShow Answer

According to the purchasing power parity,if the price level in the US rises relative to Mexico​

Correct AnswerverifiedShow Answer

​A widget costs $1000 in the US and CAD$1200 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

Correct AnswerverifiedShow Answer

​US Exports After staying around 1.35 US dollars per Euro for years,the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014.What affect does this have US exports to Europe?

Correct AnswerverifiedThe demand for American goods by Europea...View AnswerShow Answer

​Holding other things constant,increases in the price level in the US will

Correct AnswerverifiedShow Answer

​Holding other things constant,if the Japanese Yen,appreciates,it makes the Japanese products

Correct AnswerverifiedShow Answer

​An individual in the US wants to buy a car from England which costs 12,000 pounds.If the exchange rate is 1 pound = $1.75,how much would the car cost him in dollars?

Correct AnswerverifiedShow Answer

​A lawn mower costs $500 in the US and 5188 Mexican Pesos in Mexico.The current exchange rate is 1USD=12.97MXN.At this rate,

Correct AnswerverifiedShow Answer

Holding other things constant,a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to _____________ and the supply for Shilling to __________.​

Correct AnswerverifiedShow Answer

​In the market for Canadian dollars measured in US dollars,the supply of Canadian dollars is

Correct AnswerverifiedShow Answer

When interest rates fall,people are​

Correct AnswerverifiedShow Answer

​Currency devaluations help suppliers because they make exports ________ expensive

Correct AnswerverifiedShow Answer

​In the market for Canadian dollars measured in US dollars,the supply of US dollars is

Correct AnswerverifiedShow Answer

​An expectation of a price increase in the future would cause consumers to______ and producers to_____

Correct AnswerverifiedShow Answer

A financial market panic that causes US depositors to withdraw their funds from Chinese banks,would cause a(n) in the demand of US dollars and a(n) _in the demand of the Chinese Yuan.

Correct Answer
verified

The term to describe one currency in terms of another is called

Correct Answer
verified

If the Canadian dollar appreciates,holding other things constant,it makes Canadian imports

Correct Answer
verified

A Swiss consumer wants to buy an American laptop.The exchange rate is 1USD=0.89CHF (Swiss Francs) .The laptop costs $800.How much would the laptop cost him in Swiss Francs?

Correct Answer
verified

In the case where interest rates are higher in Canada,which of the following is an example of a "carry trade"

Correct Answer
verified

Due to a boom in the US,the average rate of return on investments is likely to rise causing the demand for US dollar to

Correct Answer
verified

When interest rates go up,people are

Correct Answer
verified

According to the purchasing power parity,if the price level in the US rises relative to Mexico

Correct Answer
verified

A widget costs $1000 in the US and CAD$1200 in Canada.The current exchange rate is 1USD=1.09CAD.Given purchasing power parity,the Canadian dollar would_______to equilibrate prices

Correct Answer
verified

US Exports After staying around 1.35 US dollars per Euro for years,the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014.What affect does this have US exports to Europe?

Correct Answer
verified
The demand for American goods by Europea...
View Answer

Holding other things constant,increases in the price level in the US will

Correct Answer
verified

Holding other things constant,if the Japanese Yen,appreciates,it makes the Japanese products

Correct Answer
verified

An individual in the US wants to buy a car from England which costs 12,000 pounds.If the exchange rate is 1 pound = $1.75,how much would the car cost him in dollars?

Correct Answer
verified

A lawn mower costs $500 in the US and 5188 Mexican Pesos in Mexico.The current exchange rate is 1USD=12.97MXN.At this rate,

Correct Answer
verified

Holding other things constant,a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to ___ and the supply for Shilling to .

Correct Answer
verified

In the market for Canadian dollars measured in US dollars,the supply of Canadian dollars is

Correct Answer
verified

When interest rates fall,people are

Correct Answer
verified

Currency devaluations help suppliers because they make exports ________ expensive

Correct Answer
verified

In the market for Canadian dollars measured in US dollars,the supply of US dollars is

Correct Answer
verified

An expectation of a price increase in the future would cause consumers to__ and producers to_

Correct Answer
verified