Exam 16: How Exchange Rates Are Determined

Transactions that involve currently produced goods and services, including the balance of goods and services and net unilateral transfers, are explicitly measured in the

If the price of a new Rolex watch is 18,000 francs in Switzerland, ignoring all other costs, what will the U.S. dollar price be if one Swiss franc buys $0.78 dollars?

If the dollar depreciates relative to foreign currency, the dollar price of foreign goods will tend to

The balance of payments for the United States is the record of transactions between the United States and

An increase in real income in the United States will do which of following?

The demand for dollars in the foreign exchange market

If the dollar depreciates, foreigners will tend to respond by

-Which of the following would best explain the increase in the supply of dollars illustrated in the Figure ?

If a hotel room in downtown Tokyo costs 15,000 yen per night and the yen/dollar exchange rate is 100, what is the room's dollar price?

When U.S. merchandise imports are greater than exports, the United States is running a

When U.S. merchandise exports are greater than imports, the United States is running a

Jets is the currency of Tulatula. When Tom, an American traveler, visited Tulatula in 2008, he spent 150 jets per night for a hotel room. Three years later in 2011, he also spent 150 jets per night. However, the dollar appreciated over this period and the new exchange rate was 8.50 versus 7.50 in 2008. How did the change in the exchange rate affect the dollar price of the hotel room?

If an American-made handbag cost $129.00 and the dollar appreciated, the foreign price of the handbag would tend to

Which of the following is most likely to cause the supply of dollars to increase?

The number of units of foreign currency that can be acquired with one unit of domestic money is called the

The exchange rate is

The relationship between changes in foreign prices of U.S. goods relative to foreign price of foreign goods and the demand for dollars is

The exchange rate is best defined as

If the nominal U.S. return (on an investment in a foreign instrument that earns the nominal foreign interest rate) is less than the nominal foreign return plus the exchange rate adjustment, then lenders will supply ____ funds in the U.S. market and borrowers will borrow ___ funds in foreign markets.

The supply of dollar-denominated funds comes from the