ECONOMICS 1120207 - MULTIPLECHOICE. 77 A ,reducesexports, trade B Aninc

ECONOMICS 1120207 - MULTIPLECHOICE. 77 A ,reducesexports,...

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.77) How does an increase in a countryʹs exchange rate affect its balance of trade?A) An increase in the exchange rate raises imports, reduces exports, and reduces the balance oftrade.B) An increase in the exchange rate reduces imports, raises exports, and reduces the balance oftrade.C) An increase in the exchange rate raises imports, reduces exports, and increases the balanceof trade.D) An increase in the exchange rate reduces imports, raises exports, and increases the balanceof trade.Answer: A77)Page Ref: 1024-025/642-643Learning Outcome: Macro-15: Describe how government policies and exchange rates affect open economymacroeconomics.78) If the nominal exchange rate between the American dollar and the Canadian dollar is 0.89Canadian dollars per American dollar, how many American dollars are required to buy aproduct that costs 2.5 Canadian dollars?78)Page Ref: 1023/641Learning Outcome: Macro-15: Describe how government policies and exchange rates affect open economymacroeconomics.79) Youʹre traveling in Ireland and are thinking about buying a new digital camera. Youʹve decidedyouʹd be willing to pay $125 for a new camera, but cameras in Ireland are all priced in euros. Ifthe exchange rate is 0.85 euros per dollar, whatʹs the highest price in euros youʹd be willing topay for a camera?Page Ref: 1023/641Learning Outcome: Macro-15: Describe how government policies and exchange rates affect open economymacroeconomics.80) Youʹre traveling in Ireland and are thinking about buying a new digital camera. Youʹve decidedyouʹd be willing to pay $125 for a new camera, but cameras in Ireland are all priced in euros. Ifthe camera youʹre looking at costs 115 euros, under which of the following exchange rates wouldyou be willing to purchase the camera? (Assume no taxes or duties are associated with thepurchase.)80)Page Ref: 1023/641Learning Outcome: Macro-15: Describe how government policies and exchange rates affect open economymacroeconomics.
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