quiz 18ma - its balance of payments is forced to: a. Buy...

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Quiz 18 (35). 1. The exchange rate of the U.S. dollar will tend to appreciate if: a. The U.S. economy grows faster than foreign economies b. The Fed raises the money supply, lowering interest c. Inflation is higher in the U.S. than elsewhere d. U.S. exports rise faster than U.S. imports 2. The purchasing-power parity theory: a. Is more relevant in the short run than in the long run b. Predicts that a country’s exchange rate will depreciate if it experiences relatively high inflation c. Predicts that a country’s exchange rate will depreciate if it lowers its interest rates d. Relates mostly to the price of services not goods 3. The Fed can help to lower the exchange rate of dollar by: a. Buying the currencies of other countries b. Selling government securities c. Increasing short-term interest rates d. Buying dollar son the international market 4. Under a system of fixed exchange rates, a country with a deficit in
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Unformatted text preview: its balance of payments is forced to: a. Buy foreign exchange b. Sell foreign exchange c. Increase its rate of economic growth d. Reduce taxes 5. The gold standard: a. Was a simple mechanism for changing rates between countries: b. Is the current system of international finance c. Prevented countries from controlling their domestic price levels d. Led to inflation when imports increased 6. Under the current system of floating exchange rates, speculation in currency markets: a. Has virtually disappeared b. Had destabilized exchange rate fluctuations c. Has stabilized exchange rate fluctuations d. Hs been conducted primarily by IMF 7. Since 1980s, the exchange rate of the U.S. dollar has: a. Been remarkably constant b. Both risen sharply and fallen sharply c. Fallen consistently d. Risen consistently...
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This note was uploaded on 09/09/2008 for the course ECON 202 taught by Professor Fernandez during the Fall '08 term at University of Louisville.

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quiz 18ma - its balance of payments is forced to: a. Buy...

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