Exam 18: Part A: The Balance of Payments and Exchange Rates

The idea that flexible exchange rates equate the purchasing power of national currencies is called the:

The graph below shows the supply and demand for Swiss francs in the absence of any intervention by the central monetary authorities.$0.25 is the value of the franc fixed by the central bank.Which of the following is correct?

Which of the following have substantially equivalent effects insofar as a nation's volume of exports and imports is concerned?

Which of the following lists of exchange rates is arranged in proper historical order?

Under the managed floating system of exchange rates:

A nation's balance on the current account is equal to its exports less its imports of:

The Canadian supply of pounds is:

Which one of the following, other things equal, will directly alter Canada's balance of trade?

The export of capital is recorded as a credit on a nation's capital account in its balance of payments statement.

Canadian exports increase and Canadian imports decrease the supplies of foreign monies owned by Canadian banks.

Suppose the exchange rate between the Canadian dollar and the Japanese yen was $1 = 220 yen in 2012.In 2014, the exchange rate was $1 = 100 yen.Refer to the above information.Between 2012 and 2014, the:

Assume that Switzerland and Britain have flexible exchange rates.Other things unchanged, if economic growth is more rapid in Switzerland than in Britain:

The following table shows the balance of payments statement for the hypothetical nation of Zabella in 2014.All the figures are in billions of dollars. Refer to the above data.Given the scenario, it can be said that Zabella experienced a balance of payments:

The following table shows the balance of payments statement of Transylvania for 2013.All the figures are in billions of dollars. Refer to the above data.In 2013, Transylvania realized a balance of payments deficit.

Refer to the above diagram where D and S are Canada's demand for and supply of Swiss francs.At the equilibrium exchange rate, E, Canada's balance of payments is in equilibrium.Under a system of fixed exchange rates, the shift in demand from D to D' will cause:

The Bretton Woods system of exchange rates relied on:

In considering pounds and dollars, when the dollar rate of exchange for the British pound rises:

Suppose the capital account balance of an economy is -61 billion and the stock of official international reserves is -$11 billion.Given the scenario, the balance in the current account is:

A country's annual balance of payments statement must always balance because:

Under the managed floating exchange rate system, a government may be able to reduce the international value of its currency by: