Exam 17: International Finance

On Tuesday Thomas buys 125 Japanese yen per Canadian dollar, and on Wednesday he buys 120 Japanese yen per Canadian dollar.What has happened to the values of these two currencies?  

Which of the following best describes a graph that shows the supply and demand for foreign exchange?  

Assume Canada has only one trading partner.Which of the following factors is NOT held constant when drawing the Canadian demand curve for foreign currency?  

When does a nation have an unfavourable balance of trade?  

How is the value of a country's exports listed in its balance of payments account?  

How is the foreign exchange market affected as the price of foreign exchange decreases relative to the Canadian dollar?  

Suppose foreigners increase their ownership of Canadian assets.What would this help to offset?  

Suppose that Canadian incomes rise relative to British incomes.How will each country's currency be affected?  

Exhibit 16-4 -Refer to the graph in the exhibit.Suppose Canadian tastes for British goods increase.How will the graph change?  

In the Bretton Woods system, how was the exchange rate fixed?  

What type of foreign exchange rate system is used in the current international monetary system?  

Which term refers to Canadian investment earnings from foreign assets minus foreigners' earnings from their Canadian assets?  

Suppose a basket of goods costs $400 in Canada and £200 in Britain.And suppose the exchange rate is $1/pound.According to the purchasing power parity theory, what will happen in the foreign exchange market?  

Suppose Canadian demand for foreign exchange increases.How will the foreign exchange market be affected?  

Which of the following is NOT included in the merchandise trade balance?  

Suppose the exchange rate changes from €1 per Canadian dollar to €1.2 per Canadian dollar.What has happened to the Canadian dollar?  

How is the trade balance calculated?  

Which of the following would increase the Canadian demand for foreign currency?  

What does a nation's merchandise trade balance reflect?  

Suppose the purchasing power parity theory is literally true.Which of the following would occur?