Pre-Test Chap 38 e18 - Pre-Test Chap 38 e18 Student: _ 1....

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Pre-Test Chap 38 e18 Student: ___________________________________________________________________________ 1. The Bretton Woods Agreement featured a system of: A. Freely floating exchange rates B. Fixed exchange rates based on the gold standard C. Free international trade based on reduced tariffs and quotas D. Adjustable-peg exchange rates, managed by central monetary authorities in trading nations It shows supply and demand schedules for the European euro. Assume that exchange rates are flexible. 2. Refer to the above table. At equilibrium what will be the euro rate of exchange for one U.S. dollar? A. .95 euro B. 1.00 euros C. 1.11 euros D. 1.23 euros 3. Consider the currency market for Japanese yen and U.S. dollars. An increase in the supply of Japanese yen results in: A. An appreciation of the yen and a depreciation of the dollar B. A depreciation of the yen and a depreciation of the dollar C. An appreciation of the yen and an appreciation of the dollar D. A depreciation of the yen and an appreciation of the dollar 4. Which was characteristic of international trade in most years from 1879-1934? A. Government control of exchange rates B. Extensive and rising artificial barriers to trade C. A fixed-rate system of the gold standard D. A small and declining volume of trade and investment 5. If the United States wants to regain ownership of domestic assets sold to foreigners, it will have to: A. Increase domestic consumption B. Increase its national debt C. Export more than it imports D. Import more than it exports
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6. The current account on a nation's balance of payments statement includes all of the following except: A. The nation's goods exports B. The nation's goods imports C. Net investment income D. Official reserves 7. Which appears as a positive item on the balance of payments account for the United States? A. U.S. goods imports B. U.S. tourists spending money in the other countries C. The buying of a U.S. Treasury bond by a foreign bank D. The payment of stock dividends by U.S. firms to foreign shareholders 8. Which system would be accompanied by occasional currency interventions by central banks to stabilize or alter rates to avoid persistent balance of payments deficits or surpluses? A. The gold standard B. Fixed exchange rates C. Flexible exchange rates D. Managed floating exchange rates 9. If country A experiences rapid inflation while country B has a stable price level, this will: A. Shift the demand curve for country A's currency in the foreign exchange market to the right
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Pre-Test Chap 38 e18 - Pre-Test Chap 38 e18 Student: _ 1....

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