Question 1

Describe how it would be possible for the nominal exchange rate to depreciate and the real exchange rate to appreciate.

Accepted Answer

The real exchange rate is the relative p

Question 2

Suppose that prices in the U.S. rose relative to prices in Canada. Describe what would tend to happen to the exchange rate of the U.S. dollar relative to the Canadian dollar.

Accepted Answer

[R($/CAN$] = P^US/P^CAN In this equation, the e

Question 3

If the money supply in the EU is rising faster than the money supply in the U.S. then:

Accepted Answer

A)  the dollar should appreciate in nominal terms. 
B)  the dollar should depreciate in nominal terms. 
C)  the dollar should appreciate in real terms. 
D)  the dollar should depreciate in real terms. 
A)  the dollar should appreciate in nominal terms. 
B)  the dollar should depreciate in nominal terms. 
C)  the dollar should appreciate in real terms. 
D)  the dollar should depreciate in real terms.

Question 4

If real GDP in the EU is rising faster than real GDP in the U.S. then:

Accepted Answer

A)  the dollar should appreciate in nominal terms. 
B)  the dollar should depreciate in nominal terms. 
C)  the dollar should appreciate in real terms. 
D)  the dollar should depreciate in real terms. 
A)  the dollar should appreciate in nominal terms. 
B)  the dollar should depreciate in nominal terms. 
C)  the dollar should appreciate in real terms. 
D)  the dollar should depreciate in real terms.

Question 5

If the proportion of money individuals want to hold increases in the EU and the proportion of money individuals want to hold remains constant in the U.S. then:

Accepted Answer

A)  the dollar should appreciate in nominal terms. 
B)  the dollar should depreciate in nominal terms. 
C)  the dollar should appreciate in real terms. 
D)  the dollar should depreciate in real terms. 
A)  the dollar should appreciate in nominal terms. 
B)  the dollar should depreciate in nominal terms. 
C)  the dollar should appreciate in real terms. 
D)  the dollar should depreciate in real terms.

Describe how it would be possible for the nominal exchange rate to depreciate and the real exchange rate to appreciate.

Suppose that prices in the U.S. rose relative to prices in Canada. Describe what would tend to happen to the exchange rate of the U.S. dollar relative to the Canadian dollar.

If the money supply in the EU is rising faster than the money supply in the U.S. then:

If real GDP in the EU is rising faster than real GDP in the U.S. then:

If the proportion of money individuals want to hold increases in the EU and the proportion of money individuals want to hold remains constant in the U.S. then:

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Factor Endowments and the Commodity Composition of Trade

Intraindustry Trade

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

International Transactions and Financial Markets

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Output and the Exchange Rate in the Short Run

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters

Exam 16: Price Levels and the Exchange Rate in the Long Run

Describe how it would be possible for the nominal exchange rate to depreciate and the real exchange rate to appreciate.

Suppose that prices in the U.S. rose relative to prices in Canada. Describe what would tend to happen to the exchange rate of the U.S. dollar relative to the Canadian dollar.

If the money supply in the EU is rising faster than the money supply in the U.S. then:

If real GDP in the EU is rising faster than real GDP in the U.S. then:

If the proportion of money individuals want to hold increases in the EU and the proportion of money individuals want to hold remains constant in the U.S. then:

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Factor Endowments and the Commodity Composition of Trade

Intraindustry Trade

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

International Transactions and Financial Markets

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Output and the Exchange Rate in the Short Run

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters