Quiz - Chapters 7 and 26

Quiz - Chapters 7 and 26 - Points Awarded 120.00 Points...

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Points Awarded 120.00 Points Missed 0.00 Percentage 100% 1. A factor helping determine demand for the dollar in the foreign exchange market is A) the expected future exchange rate. B) the expected future interest rate. C) the level of U.S. imports. D) the supply of U.S. dollars. Points Earned: 1.0/1.0 Correct Answer(s): A 2. A factor determining the supply of U.S. dollars in the foreign exchange market is A) the U.S. demand for imports. B) the world supply of imports. C) both U.S. export and import levels. D) the ratio of U.S. export to U.S. imports. Points Earned: 1.0/1.0 Correct Answer(s): A
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3. If the equilibrium exchange rate for the dollar is 110 yen per dollar and the current exchange rate is 120 yen per dollar, then the A) supply curve of U.S. dollars shifts rightward. B) dollar will depreciate. C) dollar will appreciate. D) demand curve for U.S. dollars shifts rightward. Points Earned: 1.0/1.0 Correct Answer(s): B 4. Suppose the current exchange rate between the euro and the United States dollar is 1.15 euros per dollar. If interest rates in the United States increase and interest rates in Europe remain unchanged then A) the demand for dollars will increase. B) the demand for dollars will decrease. C) the demand for euros will increase. D) None of the above answers is correct. Points Earned: 1.0/1.0 Correct Answer(s): A
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5. When the U.S. interest rate rises relative to that in other counties, in the foreign exchange market the demand for U.S. dollars ________ and the supply of U.S. dollars ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases Points Earned: 1.0/1.0 Correct Answer(s): B 6. Using the above figure, which of the following is correct? A) 1 guilder will sell for $2. B) 1 dollar will sell for 1/2 guilder. C) A shortage of guilders exists at an exchange rate above $0.60. D) A surplus of guilders exists at an exchange rate above $0.60. Points Earned: 1.0/1.0 Correct Answer(s): D 7. Suppose the exchange rate between the U.S. dollar and the Jamaican dollar was $1 U.S. = $40 Jamaican dollars. A beach towel sells for $20 in Miami and $60 Jamaican in Negril. A) Purchasing power parity does not prevail with these prices.
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B) The U.S. dollar would be expected to depreciate. C) The Jamaican dollar would be expected to appreciate. D) All of the above are correct. Points Earned: 1.0/1.0 Correct Answer(s): D 8. An American consumer buys a French luxury product in New York. In the U.S. balance of payments accounts, this transaction directly appears in A) the official settlements account. B) the imports part of the current account. C) the net transfers part of the current account. D) the capital account. Points Earned:
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This note was uploaded on 09/13/2011 for the course ECON 206 taught by Professor Parkin during the Spring '11 term at Buena Vista.

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Quiz - Chapters 7 and 26 - Points Awarded 120.00 Points...

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