Exam 13: Exchange Rates and the Open Economy

The impact of monetary policy through exchange rates tends to ______ the impact of monetary policy through real interest rates.

Based on this figure, if the krone exchange rate is fixed at $0.15 dollars per krone, then the krone is:

Because many European nations have adopted the euro as their common currency, they are ______ able to conduct independent ______ policy.

The U.S. dollar exchange rate, e, where e is the nominal exchange rate expressed as Japanese yen per U.S. dollar, will appreciate when:

A speculative attack is:

Based on this figure, if an exchange rate of $0.09 dollars per Norwegian krone is maintained, the Norwegian government will gain (in dollar) _______ worth of international reserves per period.

Tight monetary policy will ______ net exports as a result of a ______ currency.

Based on this figure, if the official value of krone is fixed at $0.09 per krone, then the Norwegian krone is ____ and the international reserves of Norway will ______ krone per period.

A currency devaluation is a(n):

Each of the following would decrease the supply of U.S. dollars, shifting the supply curve for dollars to the left, except:

If the exchange rate moves from 10 Mexican pesos per U.S. dollar to 12 Mexican pesos per U.S. dollar, then the Mexican peso has ______ and the U.S. dollar has _____.

The exchange rate that equates the quantities of currency supplied and demanded in the foreign exchange market is called the ______ exchange rate.

Each of the following would increase the demand for U.S. dollars, shifting the demand curve for dollars to the right, except:

If a certain automotive part can be purchased in Mexico for 60 pesos or in the United States for $6.25 and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:

The following table provides nominal exchange rates for the U.S. dollar. Based on these data, the nominal exchange rate equals approximately ______ zloty per South African rand or, equivalently, ______ rand per Polish zloty.

As U.S. real GDP rises, wealthier households may decide to buy ______ foreign goods and assets, which would cause a(n) ______ of the U.S. dollar.

Tight monetary policy raises the real interest rate, which ______ the demand for dollars, ______ the supply of dollars, and ______ the equilibrium value of the dollar.

When the Fed eases U.S. monetary policy, domestic interest rates ______, making U.S. assets relatively less attractive to foreign investors, and ______ the equilibrium exchange rate.

Someone who wants both the U.S. dollar to be ______ compared to other currencies and the value of U.S. net exports to be ______ wants two things that may be contradictory.

An increase in the nominal exchange rate, e, defined as the number of units of the foreign currency that one unit of the domestic currency will buy, indicates that the domestic currency has ______ relative to the foreign currency.