Exam 21: Exchapterange Rates and Financial Links Between Countries

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.?Figure 21.1??In the figure:?D₁ and D₂: Demand for Brazilian reals?S₁ and S₂: Supply of Brazilian reals -Refer to Figure 21.1. Determine the equilibrium exchange rate and equilibrium quantity of Brazilian reals, if D₁ and S₁ are the relevant demand and supply curves for Brazilian reals in this market.

(Multiple Choice)

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Question 21

Other things equal, an appreciation of the Algerian dinar in relation to the euro will act to increase Algerian demand for European goods and to decrease European demand for Algerian goods.

(True/False)

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Question 22

An increase in the demand for rubles causes the ruble to appreciate.

(True/False)

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Question 23

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.?Figure 21.1??In the figure:?D₁ and D₂: Demand for Brazilian reals?S₁ and S₂: Supply of Brazilian reals -Refer to Figure 21.1. Assume that the initial equilibrium exchange rate is 8 Mexican pesos per Brazilian real and 150 brazilian reals are traded in the market. Suppose, there is an increase in the Brazilian demand for Mexican exports. Other things remaining equal, which of the following can be concluded?

(Multiple Choice)

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Question 24

Under the Bretton Woods system, international debts were settled in:

(Multiple Choice)

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Question 25

If the price of an ounce of gold is 200 ZARs in South Africa and $75 in Canada, what will be the South African Rand (ZAR) per Canadian dollar (C$) exchange rate?

(Multiple Choice)

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Question 26

When a U.S. importer needs $20,000 to settle an invoice for 228,000 Uruguayan pesos, the price of 1 dollar is 11.4 Uruguayan pesos.

(True/False)

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Question 27

When the exchange rate fluctuates around a fixed central target, allowing for a moderate amount of fluctuation, while tying the currency to the target central rate, the exchange rate is under:

(Multiple Choice)

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Question 28

The IMF comprises of 50 member countries including all developed countries, and a few countries of Asia and Latin America.

(True/False)

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Question 29

The figure given below depicts the demand and supply of Brazilian reals in the foreign exchange market. Assume that the market operates under a flexible exchange rate regime.?Figure 21.1??In the figure:?D₁ and D₂: Demand for Brazilian reals?S₁ and S₂: Supply of Brazilian reals -Refer to Figure 21.1. Suppose the initial equilibrium exchange rate is 10 pesos per real. A decrease in the Mexican demand for Brazilian coffee, other things equal, is most likely to result in a new equilibrium exchange rate of:

(Multiple Choice)

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Question 30

The U.S. provides about _____ percent of the annual membership fees of IMF member countries.

(Multiple Choice)

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Question 31

Suppose a Japanese investor purchases a dollar deposit that yields 5 percent interest at the end of a year. What will be the approximate return in terms of yen at maturity if the exchange rate moves from $1 = ¥100 to $1 = ¥105 during the year?

(Multiple Choice)

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Question 32

Purchasing power parity exists when domestic currency:

(Multiple Choice)

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Question 33

Fixed exchange rates allow countries to formulate their economic policies independently of other nations.

(True/False)

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Question 34

Appreciation of the dollar means that now it takes more dollars to buy one unit of foreign currency.

(True/False)

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Question 35

Fixed exchange rates require the economic policies of countries linked by the exchange rate to be:

(Multiple Choice)

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Question 36

If $1 was equivalent to 120 Japanese yen in 2008 and 125 Japanese yen in 2010, it implies in 2010, there was:

(Multiple Choice)

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Question 37

An appreciation of the Norwegian kroner in relation to the U.S. dollar is most likely to cause:

(Multiple Choice)

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Question 38

The exchange-rate arrangement that emerged from the Bretton Woods conference is often referred to as the:

(Multiple Choice)

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Question 39

No currency ever appreciated or depreciated under the Bretton Woods system as it was based on a system of fixed exchange rates.

(True/False)

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Question 40

Showing 21 - 40 of 132

Other things equal, an appreciation of the Algerian dinar in relation to the euro will act to increase Algerian demand for European goods and to decrease European demand for Algerian goods.

An increase in the demand for rubles causes the ruble to appreciate.

Under the Bretton Woods system, international debts were settled in:

If the price of an ounce of gold is 200 ZARs in South Africa and $75 in Canada, what will be the South African Rand (ZAR) per Canadian dollar (C$) exchange rate?

When a U.S. importer needs $20,000 to settle an invoice for 228,000 Uruguayan pesos, the price of 1 dollar is 11.4 Uruguayan pesos.

When the exchange rate fluctuates around a fixed central target, allowing for a moderate amount of fluctuation, while tying the currency to the target central rate, the exchange rate is under:

The IMF comprises of 50 member countries including all developed countries, and a few countries of Asia and Latin America.

The U.S. provides about _____ percent of the annual membership fees of IMF member countries.

Suppose a Japanese investor purchases a dollar deposit that yields 5 percent interest at the end of a year. What will be the approximate return in terms of yen at maturity if the exchange rate moves from $1 = ¥100 to $1 = ¥105 during the year?

Purchasing power parity exists when domestic currency:

Fixed exchange rates allow countries to formulate their economic policies independently of other nations.

Appreciation of the dollar means that now it takes more dollars to buy one unit of foreign currency.

Fixed exchange rates require the economic policies of countries linked by the exchange rate to be:

If $1 was equivalent to 120 Japanese yen in 2008 and 125 Japanese yen in 2010, it implies in 2010, there was:

An appreciation of the Norwegian kroner in relation to the U.S. dollar is most likely to cause:

The exchange-rate arrangement that emerged from the Bretton Woods conference is often referred to as the:

No currency ever appreciated or depreciated under the Bretton Woods system as it was based on a system of fixed exchange rates.

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

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