quiz11 - Econ 210 Fall 2010 Practice Quiz #11 Questions 1....

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Econ 210 Fall 2010 Practice Quiz #11 Questions 1. If rising incomes in China result in an increase in demand for imports in China, then what will happen to the supply of the Chinese Yuan and the exchange rate for the Chinese Yuan? a. The supply of the Chinese Yuan will increase and the Chinese Yuan will appreciate b. The supply of the Chinese Yuan will increase and the Chinese Yuan will depreciate c. The supply of the Chinese Yuan will decrease and the Chinese Yuan will appreciate d. The supply of the Chinese Yuan will decrease and the Chinese Yuan will depreciate 2. All else remaining constant, a decrease in demand for the United States dollar will cause what to happen in the foreign exchange market? a. The US dollar will appreciate and the quantity of dollars exchanged in the Foreign Exchange Markets will increase b. The US dollar will appreciate and the quantity of dollars exchanged in the Foreign Exchange Markets will decrease c. The US dollar will depreciate and the quantity of dollars exchanged in the Foreign Exchange Markets will increase d. The US dollar will depreciate and the quantity of dollars exchanged in the Foreign Exchange Markets will decrease 3. If interest rates rise in the United States and all else remains unchanged, what will happen to demand for US currency and the exchange rate for the US dollar? a. Demand for US currency will increase and the US dollar will appreciate b. Demand for US currency will increase and the US dollar will depreciate c. Demand for US currency will decrease and the US dollar will appreciate d. Demand for US currency will decrease and the US dollar will depreciate 4. Which of the following could NOT cause the dollar to appreciate in nominal terms? a. An increase in US interest rates b. An increase in the expected rate of change in the value of the US dollar c. An increase US demand for foreign imports d. All of the above could cause the nominal exchange rate to increase 5. Which best describes a system of flexible exchange rates? a. Exchange rates are fixed at a fixed rate of US dollars b. The central bank does not intervene in the foreign exchange markets to move the equilibrium rate to an announced level c. Central banks privately intervene in foreign exchange markets to influence exchange rates
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d. Exchange rates are based on the supply of gold in each country 6. If the exchange rate between the Japanese yen and the dollar goes from 94.5 yen per dollar to 88.9 yen per dollar, then a. The value of the Dollar rose compared to the Yen because we can now purchase more Yen with a single dollar. b. The value of the Dollar fell compared to the Yen because we can now purchase more Yen with a single dollar. c. The value of the Dollar rose compared to the Yen because we can now purchase fewer Yen with a single dollar.
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quiz11 - Econ 210 Fall 2010 Practice Quiz #11 Questions 1....

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