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Econ Problem Set 03

# Econ Problem Set 03 - Problem Set 03 Econ 103 Macroeconomic...

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Problem Set 03 page 1/5 Econ 103 – Macroeconomic Principles Fall 2010 Multiple-choice questions Identify the letter of the choice that best completes the statement or answers the question. International Macroeconomics 1. If the exchange rate of yen per dollar increases from 100 yen = \$1 to 110 yen = \$1, then A) Japanese-produced goods would become more expensive B) the dollar has depreciated C) the yen has appreciated D) U.S.-produced goods would become more expensive E) U.S. exports would increase 2. If the exchange rate between the yen and the dollar changed from 100 yen = \$1 to 110 yen = \$1, then A) the dollar depreciated B) U.S. goods will become less expensive to the Japanese C) the dollar appreciated D) Japanese goods will become more expensive to U.S. citizens E) the demand for dollars will increase 3. A depreciation of Israel's currency (the shekel) means that A) Israel's exports will become more expensive B) Israel's imports will become more expensive C) Israel's imports will become less expensive D) it now requires fewer shekels to exchange for one unit of another currency E) it now requires more of other currencies in exchange for one shekel 4. Suppose a U.S.-made machine costs \$500 and the exchange rate is 100 yen = \$1. A Japanese firm purchasing this machine would pay A) 100 yen B) 500 yen C) 5,000 yen D) 10,000 yen E) 50,000 yen 5. Suppose a U.S.-made machine costs \$500 and the exchange rate was 100 yen = \$1 yesterday. Today the exchange rate is 90 yen = \$1. You know then that the A) machine would now cost more dollars B) machine would now cost the Japanese firm less yen C) machine would now cost less dollars D) machine would now cost the Japanese firm more yen E) yen has depreciated in value

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Problem Set 03 page 2/5 Econ 103 – Macroeconomic Principles Fall 2010 6. If the Mexican government devalues its peso, it is A) allowing the peso on the foreign exchange market to float to a higher equilibrium level B) allowing the peso on the foreign exchange market to float to a lower equilibrium level C) intentionally decreasing the value of the peso D) intentionally increasing the value of the peso
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Econ Problem Set 03 - Problem Set 03 Econ 103 Macroeconomic...

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