practicemidterm_international - expensive. (a) more; less...

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Econ 4721-002: Money and Banking, Fall 2011 Practice Questions for International Monetary System 1. When the value of the British pound changes from $1.25 to $1.50, the pound has and the U.S. dollar has . (a) appreciated; appreciated (b) depreciated; appreciated (c) appreciated; depreciated (d) depreciated; depreciated 2. On April 7, 2006, one U.S. dollar traded on the foreign exchange market for about 0.83 euros. Therefore, one euro would have purchased about U.S. dollars. (a) 0.83 (b) 1.00 (c) 1.20 (d) 1.83 3. Everything else held constant, when a country’s currency appreciates, the country’s goods abroad become expensive and foreign goods in that country become
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Unformatted text preview: expensive. (a) more; less (b) more; more (c) less; less (d) less; more 4. According to the law of one price, if the price of Colombian coee is 100 Colombian pesos per pound and the price of Brazilian coee is 4 Brazilian reals per pound, then the exchange rate between the Colombian peso and the Brazilian reals is: 1 (a) 40 pesos per real. (b) 100 pesos per real. (c) 25 pesos per real. (d) 0.04 pesos per real. 5. The theory of PPP suggests that if one countrys price level rises relative to an-others, its currency should: (a) depreciate. (b) appreciate. (c) oat. (d) do none of the above. 2...
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This note was uploaded on 01/24/2012 for the course ECON 4751H taught by Professor Triece during the Fall '11 term at Minnesota.

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practicemidterm_international - expensive. (a) more; less...

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