Exam 20: Exchange Rates, Balance of Payments, and International Debt

Explain why a merchandise trade deficit created by imports of consumer goods is more troublesome than a merchandise trade deficit created by imports of capital goods.

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Question 1

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A merchandise trade deficit created by imports of consumer goods is unlikely to spur economic growth, while a merchandise trade deficit created by imports of capital goods may stimulate economic growth that will lead to an expansion of exports in the future, making it easier to offset the merchandise trade deficit with a future trade surplus.

-Exhibit FF-1 depicts the foreign exchange market for yen per dollar and dollars per yen. The supply curve in graph FF-1(A) is reflects

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Question 2

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Foreign investment in the U.S. causes the

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Question 3

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If you compare the balance of payments accounts of Japan, China, Pakistan, and Romania, you may be surprised to see that they all

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Question 4

Suppose you put $1,000 aside for a vacation in Mexico. On your flight to Cancun, the passenger seated next to you says: "Did you hear the good news? We can do and buy more on our vaction now." You ponder the comment and say to yourself:

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Question 5

A fixed exchange rate, say, Mexican pesos per dollar, is determined by

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Question 6

A decrease in U.S. interest rates relative to Japanese interest rates will

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Question 7

A rise in the price of a nation's currency relative to foreign currencies is called

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Question 8

The main problem with a system of floating exchange rates is that it

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Question 9

The absolute value of a country's balance on current account will always equal its balance on capital account, although one is positive and the other negative.

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Question 10

A depreciation in Micromania's currency, the micro, occurs when the exchange rate changes from

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Question 11

A government's policy to lower the exchange rate is called ____________.

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Question 12

Devaluation of a currency stimulates exports.

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Question 13

-The demand curve in Exhibit FF-1(A) slopes downward because

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Question 14

Explain the automatic correction mechanism that drives a country's current account balance to zero.

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Question 15

Historical note: Until 1975, the United States' balance of trade was characterized by

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Question 16

Arbitrage keeps markets from reaching equilibrium.

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Question 17

Fixed exchange rates require governments to have

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Question 18

With the increasing normalization of relations with China, more and more Chinese goods appear on the U.S. market. Haven't you noticed it? If we buy more from China than China buys from us, then

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Question 19

If interest rates in Canada fall below those in the rest of the world, then

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Question 20

Showing 1 - 20 of 174

Exam 20: Exchange Rates, Balance of Payments, and International Debt

Explain why a merchandise trade deficit created by imports of consumer goods is more troublesome than a merchandise trade deficit created by imports of capital goods.

-Exhibit FF-1 depicts the foreign exchange market for yen per dollar and dollars per yen. The supply curve in graph FF-1(A) is reflects

Foreign investment in the U.S. causes the

If you compare the balance of payments accounts of Japan, China, Pakistan, and Romania, you may be surprised to see that they all

Suppose you put $1,000 aside for a vacation in Mexico. On your flight to Cancun, the passenger seated next to you says: "Did you hear the good news? We can do and buy more on our vaction now." You ponder the comment and say to yourself:

A fixed exchange rate, say, Mexican pesos per dollar, is determined by

A decrease in U.S. interest rates relative to Japanese interest rates will

A rise in the price of a nation's currency relative to foreign currencies is called

The main problem with a system of floating exchange rates is that it

The absolute value of a country's balance on current account will always equal its balance on capital account, although one is positive and the other negative.

A depreciation in Micromania's currency, the micro, occurs when the exchange rate changes from

A government's policy to lower the exchange rate is called ____________.

Devaluation of a currency stimulates exports.

-The demand curve in Exhibit FF-1(A) slopes downward because

Explain the automatic correction mechanism that drives a country's current account balance to zero.

Historical note: Until 1975, the United States' balance of trade was characterized by

Arbitrage keeps markets from reaching equilibrium.

Fixed exchange rates require governments to have

With the increasing normalization of relations with China, more and more Chinese goods appear on the U.S. market. Haven't you noticed it? If we buy more from China than China buys from us, then

If interest rates in Canada fall below those in the rest of the world, then

Introduction

Production Possibilities and Opportunity Costs

Demand and Supply

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

The Economic Problems of Less-Developed Economies

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