chap038 - CHAPTER 38 Exchange Rates, the Balance of...

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Unformatted text preview: CHAPTER 38 Exchange Rates, the Balance of Payments, and Trade Deficits Topic Question numbers ___________________________________________________________________________________________________ 1. Financing international trade 1-8 2. Balance of payments 9-64 3. Exchange rates 65-78 4. Floating exchange rates; fixed exchange rates 79-113 5. Gold standard 114-120 6. Bretton Woods system 121-123 7. Managed float 124-132 8. U.S. trade deficits 133-140 Consider This 141-142 Last Word 143-145 True-False 146-163 ___________________________________________________________________________________________________ Multiple Choice Questions Financing international trade Type: A Topic: 1 E: 712 MI: 468 MA: 378 1. U.S. export transactions create: A) a U.S. demand for foreign monies and the satisfaction of this demand decreases the supplies of dollars held by foreign banks. B) a U.S. demand for foreign monies and the satisfaction of this demand increases the supplies of dollars held by foreign banks. C) a foreign demand for dollars and the satisfaction of this demand decreases the supplies of foreign monies held by U.S. banks. D) a foreign demand for dollars and the satisfaction of this demand increases the supplies of foreign monies held by U.S. banks. Answer: D Type: A Topic: 1 E: 712 MI: 468 MA: 378 2. U.S. import transactions create: A) a foreign demand for dollars and the satisfaction of this demand decreases the supplies of foreign monies held by U.S. banks. B) a foreign demand for dollars and the satisfaction of this demand increases the supplies of foreign monies held by U.S. banks. C) a U.S. demand for foreign monies and the satisfaction of this demand decreases the supplies of foreign monies held by U.S. banks. D) a U.S. demand for foreign monies and the satisfaction of this demand increases the supplies of dollars held by foreign banks. Answer: C Type: A Topic: 1 E: 711-712 MI: 467-468 MA: 377-378 3. If a U.S. importer can purchase 10,000 pounds for $20,000, the rate of exchange is: A) $1 = 2 pounds in the United States. C) $1 = 2 pounds in Great Britain. B) $2 = 1 pound in the United States. D) $.5 = 1 pound in Great Britain. Answer: B Type: A Topic: 1 E: 712 MI: 468 MA: 378 4. Which of the following creates a supply of Canadian dollars in foreign exchange markets? A) a Frenchman redeems a bond issued by a Canadian manufacturer B) a Canadian exporter buys insurance from a U.S. firm C) an American student takes a summer trip to Canada D) a U.S. importer buys 500 cases of Canadian maple syrup Answer: B Type: A Topic: 1 E: 712 MI: 468 MA: 378 5. Other things equal, the financing of a U.S. export transaction: A) reduces U.S. interest rates. B) decreases the supplies of foreign currency held by United States banks....
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chap038 - CHAPTER 38 Exchange Rates, the Balance of...

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