Question 1

A depreciation of a nation's currency is:

Accepted Answer

A) inflationary for the nation 
B) deflationary for the nation 
C) deflationary for the trade partner 
D) any of the above 
A) inflationary for the nation 
B) deflationary for the nation 
C) deflationary for the trade partner 
D) any of the above

Question 2

The foreign exchange market is stable when:

Accepted Answer

A) The demand curve of foreign exchange is negatively inclined and the supply curve of foreign exchange is positively inclined 
B) the supply curve of foreign exchange is negatively inclined and less elastic than the demand curve 
C) the sum of the absolute values of the elasticity of the nation's demand of imports and the foreign demand for the nation's exports is greater than one 
D) all of the above 
A) The demand curve of foreign exchange is negatively inclined and the supply curve of foreign exchange is positively inclined 
B) the supply curve of foreign exchange is negatively inclined and less elastic than the demand curve 
C) the sum of the absolute values of the elasticity of the nation's demand of imports and the foreign demand for the nation's exports is greater than one 
D) all of the above

Question 3

Research on the relationship between elasticities and the current account balance suggests that,for the United States,currency depreciation would result in:

Accepted Answer

A) a significant improvement in the current account balance. 
B) no change in the current account balance. 
C) a small improvement in the current account balance. 
D) a worsening of the current account balance. 
A) a significant improvement in the current account balance. 
B) no change in the current account balance. 
C) a small improvement in the current account balance. 
D) a worsening of the current account balance.

Question 4

Suppose that under the gold standard,the price of gold is set at $30/ounce in the United States and ₤15/ounce in the United Kingdom.What are the gold import and export points if there is a 10% cost of shipping gold?

Accepted Answer

2 = $/₤ if shipping costs were

Question 5

Suppose that under the gold standard,the price of gold is set at $40/ounce in the United States and ₤15/ounce in the United Kingdom.What is the exchange rate between the dollar and the pound if there is no cost to ship gold?

Accepted Answer

The answer of Suppose that under the gold standard,the price...

Question 6

The gold standard operated from

Accepted Answer

A) about 1880 until the outbreak of World War I 
B) about 1880 until the outbreak of World War II 
C) about 1500 until the outbreak of World War I 
D) about 1500 until the outbreak of World War II 
A) about 1880 until the outbreak of World War I 
B) about 1880 until the outbreak of World War II 
C) about 1500 until the outbreak of World War I 
D) about 1500 until the outbreak of World War II

Question 7

When it is unclear whether a currency depreciation is permanent,exporters may choose not to raise their prices,especially if they fear losing market share in markets with existing production and distribution facilities.This is known as the:

Accepted Answer

A) market share effect. 
B) beachhead effect. 
C) pass-through effect. 
D) parity effect. 
A) market share effect. 
B) beachhead effect. 
C) pass-through effect. 
D) parity effect.

Question 8

A depreciation of a nation's currency shifts:

Accepted Answer

A) down its supply curve of exports in terms of the domestic currency 
B) down its supply curve of exports in terms of the foreign currency 
C) down its demand curve for exports in terms of the foreign currency 
D) up its supply curve of imports in terms of the foreign currency 
A) down its supply curve of exports in terms of the domestic currency 
B) down its supply curve of exports in terms of the foreign currency 
C) down its demand curve for exports in terms of the foreign currency 
D) up its supply curve of imports in terms of the foreign currency

Question 9

The mint parity refers to the:

Accepted Answer

A) gold export point 
B) gold import point 
C) equilibrium exchange rate 
D) ratio of the price of a unit of gold in terms of the currency of two nations 
A) gold export point 
B) gold import point 
C) equilibrium exchange rate 
D) ratio of the price of a unit of gold in terms of the currency of two nations

Question 10

A nation's demand curve for foreign exchange is derived from the:

Accepted Answer

A) foreign demand curve for the nations' exports 
B) nation's supply curve of exports 
C) domestic demand curve for imports and the foreign supply curve for the nation's imports 
D) foreign demand curve and the domestic supply curve for the nation's exports 
A) foreign demand curve for the nations' exports 
B) nation's supply curve of exports 
C) domestic demand curve for imports and the foreign supply curve for the nation's imports 
D) foreign demand curve and the domestic supply curve for the nation's exports

A depreciation of a nation's currency is:

The foreign exchange market is stable when:

Research on the relationship between elasticities and the current account balance suggests that,for the United States,currency depreciation would result in:

Suppose that under the gold standard,the price of gold is set at $30/ounce in the United States and ₤15/ounce in the United Kingdom.What are the gold import and export points if there is a 10% cost of shipping gold?

Suppose that under the gold standard,the price of gold is set at $40/ounce in the United States and ₤15/ounce in the United Kingdom.What is the exchange rate between the dollar and the pound if there is no cost to ship gold?

The gold standard operated from

When it is unclear whether a currency depreciation is permanent,exporters may choose not to raise their prices,especially if they fear losing market share in markets with existing production and distribution facilities.This is known as the:

A depreciation of a nation's currency shifts:

The mint parity refers to the:

A nation's demand curve for foreign exchange is derived from the:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscher-Ohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Economic Growth and International Trade

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Income Adjustment Mechanism and Synthesis of Automatic

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past,present,and Future

Filters

Exam 16: The Price Adjustment Mechanism With Flexible and Fixed Exchange

A depreciation of a nation's currency is:

The foreign exchange market is stable when:

Research on the relationship between elasticities and the current account balance suggests that,for the United States,currency depreciation would result in:

Suppose that under the gold standard,the price of gold is set at $30/ounce in the United States and ₤15/ounce in the United Kingdom.What are the gold import and export points if there is a 10% cost of shipping gold?

Suppose that under the gold standard,the price of gold is set at $40/ounce in the United States and ₤15/ounce in the United Kingdom.What is the exchange rate between the dollar and the pound if there is no cost to ship gold?

The gold standard operated from

When it is unclear whether a currency depreciation is permanent,exporters may choose not to raise their prices,especially if they fear losing market share in markets with existing production and distribution facilities.This is known as the:

A depreciation of a nation's currency shifts:

The mint parity refers to the:

A nation's demand curve for foreign exchange is derived from the:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscher-Ohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Economic Growth and International Trade

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Income Adjustment Mechanism and Synthesis of Automatic

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past,present,and Future

Filters