Exam 12: Exchange Rate Determination

The purchasing- power-parity theory predicts that if the U.S.inflation rate exceeds the Japanese inflation rate by 4 percent, then the dollar's exchange value will appreciate by 4 percent against the yen.

A country's market fundamentals include economic variables, such as productivity, inflation, consumer preferences, and real interest rates.

All of the following are important long-run determinants of exchange rates EXCEPT

Suppose that $1 will buy 0.8 Swiss francs in 2015 and 0.9 francs in 2016.This change would have occurred as a result of

​ Figure 12.1 The Market for Francs -Refer to Figure 12.1.If Switzerland experienced a disastrous wheat-crop failure, leading to additional wheat imports from the United States, there would occur an

According to the safe-haven effect, investors may be willing to sacrifice an amount of return if an economy offers them a low risk repository for their funds.

Concerning exchange rate forecasting, fundamental analysis involves consideration of a variety of macroeconomic variables and policies that tend to affect currency values.

Relatively high interest rates in the United States cause the dollar to ____ in the ____.

With floating exchange rates, relatively high productivity growth for a nation leads to

Increased tariffs on U.S.steel imports cause the dollar to ____ in the ____.

Concerning exchange-rate determination, "market fundamentals" include all of the following EXCEPT

When The Economist magazine runs articles using the Big Mac hamburger to value exchange rates, it is using the principle of

​ Figure 12.1 The Market for Francs -Refer to Figure 12.1.Should preferences for imports rise in the United States and fall in Switzerland, there would occur a(n)

Concerning exchange rate forecasting, ____ relies on econometric models that are based on macroeconomic variables likely to affect currency values.

Which is NOT true about the purchasing-power parity theory?

Which example of market expectations causes the dollar to depreciate against the yen? Expectations that the U.S.economy will have

Concerning exchange rate forecasting, ______ are common sense models that require the gathering of a wide array of political and economic data and the interpretation of these data in terms of the timing, direction, and magnitude of exchange rate changes.

Economies with relatively high growth rates in labor productivity tend to find their currencies' exchange values appreciating under a floating exchange-rate system.

​ Figure 12.1 The Market for Francs -Refer to Figure 12.1.Should Swiss labor productivity rise, leading to a decrease in Swiss manufacturing costs, there would occur a(n)

If short-term interest rates rise in Germany, then the exchange value of the dollar will appreciate against the euro in the long run.