tbch13 - Chapter 13: Exchange Rates and the Foreign...

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Chapter 13: Exchange Rates and the Foreign Exchange Market: An Asset Approach Multiple Choice Questions 1. How many dollars would it cost to buy an Edinburgh Woolen Mill sweater costing 50 British pounds if the exchange rate is 1.25 dollars per one British pound? A. 50 dollars B. 60 dollars C. 70 dollars D. 62.5 dollars E. 40 British pounds Answer: D 2. How many dollars would it cost to buy an Edinburgh Woolen Mill sweater costing 50 British pounds if the exchange rate is 1.50 dollars per one British pound? A. 50 dollars B. 60 dollars C. 70 dollars D. 80 dollars E. 75 dollars Answer: E 3. How many dollars would it cost to buy an Edinburgh Woolen Mill sweater costing 50 British pounds if the exchange rate is 1.80 dollars per one British pound? A. 40 dollars B. 90 dollars C. 50 dollars D. 100 dollars E. 95 dollars Answer: B 4. The German currency is called the A. Euro B. DM C. Yen D. Dollar E. Pound Answer: A 164
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5. How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.50 dollars per British pound? A. 10 British pounds B. 20 British pounds C. 30 British pounds D. 35 British pounds E. 25 British pounds Answer: C 6. How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.80 dollars per British pound? A. 10 British pounds B. 25 British pounds C. 20 British pounds D. 30 British pounds E. 40 British pounds Answer: B 7. How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 2.00 dollars per British pound? A. 22.5 British pounds B. 32.5 British pounds C. 12.5 British pounds D. 40 British pounds E. 30 British pounds Answer: A 8. How many British pounds would it cost to buy a pair of American designer jeans costing $45 if the exchange rate is 1.60 dollars per British pound? A. 38.125 British pounds B. 28.125 British pounds C. 48.125 British pounds D. 58.125 British pounds E. 18.125 British pounds Answer: B 165
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9. What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 50 dollars in New York and 100 pounds in London? A. 1.5 dollars per British pound B. 0.5 dollars per British pound C. 2.5 dollars per British pound D. 3.5 dollars per British pound E. 2 dollars per British pound Answer: B 10. What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 60 dollars in New York and 30 pounds in London? A. 1.5 dollars per British pound B. 0.5 dollars per British pound C. 2.5 dollars per British pound D. 3.5 dollars per British pound E. 2 dollars per British pound Answer: E 11. When a country’s currency depreciates, A. foreigners find that its exports are more expensive, and domestic residents find that imports from abroad are more expensive. B. foreigners find that its exports are more expensive, and domestic residents find
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tbch13 - Chapter 13: Exchange Rates and the Foreign...

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